McColl by Ross Yockey.
The rise of NationsBank provides glimpses into the mind of Addison Reese, who seems to have executed a brilliant growth and succession plan. His grand-successor, >McColl> executed on growth, however his handoff of responsibility seems much less well done. Granted, the only data I have is from this book, which may be guilty of painting a rosy picture of his forebears, and >NationsBank> dwarfs the North Carolina National Bank where this story starts.
He crossed the street from the hotel, stepped onto the >BofA> plaza, not nearly as welcoming as his own plaza back in Charlotte, street din softened by cascading water. Here was a twelve-foot-high black marble glob of a sculpture, and he'd heard what the people here called it: the banker's heart.
>McColl> was learning that he could get along fine in the business world if he approached it as a game.
"Mr. Clark, this guy's really a great analyst."
"How do you know?" Clark shot back.
"Well, I've seen his work. It's obvious he knows what he's talking about."
"You don't know whether the guy is a great analyst or not, Mr. >McColl>. Not until five years go by and you find out whether the things he things are going to happen actually have happened."
Hugh >McColl> didn't learn life in the Marine Corps, but the marines confirmed the one value he could distill out of all his childhood experiences -- wheeling Tommy Hamer to the pool hall, completing spiral passes to swivel-hipped mill kids, sharing a Coke with the children of the "colored help", watching his father treat every sharecropper as his equal. He knew at the core of him that every human being was every bit as good as Hugh >McColl> was. No black skin or withered legs or hardscrabble labor could make him less a human being. His one value was that everyone was valuable.
The old institutions had been overturned by the hand of revolution and no substitutes had yet been erected in their stead...
He (>McColl's> grandfather) began by helping his Uncle Peter rebuild the county's legal system...
In the newspapers and on radio, at the barber shop and in the drugstore, people were blaming banks for the Depression. The men who ran banks were dubbed "banksters".
Led by New York's First National City Bank, the money-center banks found a way around "Reg-Q". They issued certificates of deposit, or CDs, which were negotiable instruments that could pay interest rates. Because they wrote these certificates with a penalty for "premature withdrawal", banks where not prohibited by Reg-Q from paying interest, as they were on deposits in checking accounts.
Those solid, stolid represeentations (corporate art) were yesterday's perception of banking. To replace them, the bank commissionned Richard Lippold's Homage to North Carolina, a "modern" sculpture of gold and silver wires, suggesting that tomorrow's banking would be an art in its own right, a light, complex, airy construction of many strings and many angles.some see art, others see criticism.
What Martin could not appreciate -- perhaps not even Reese or Storrs could -- was the intensity of the rivalry between Hugh >McColl> and Luther Hodges....could not appreciate...
As an NCNB executive you were always being graded, examined and compared; that was part of Reese's management style. His final and perhaps most elaborate scheme for stacking his players in a pyramid of merit was the Leadership Climate Study of 1973. Under this microscope, each of the twenty-six executives was questioned by house shrink James Farr. The questions had to do with each person's view of the other twenty-five.
From their first encounter, >McColl> had proven himself loyal and useful to Storrs (Reese's successor), and Storrs -- unlike Reese -- had made himself accessible to >McColl>.solidifying the lines of allegiance
By summer's end in '73.... Interest rates had been rising so rapidly that to "protect the little guy" the state legislature passed a usury law making it illegal to charge more than 8 percent interest on a first home mortgage of fifty thousand or less. When the prime rate oozed over the 8 percent limit, banks were forced to stop lending
mobile homes weren't really mobile. They were really premanufactured housing sitting on cinder blocks. And if you tried to move them, you tore them up. So if you had a premanufactured home in the wrong place, it had very little value.
One young man, who traveled all the way from London to Charlotte for a job interview was a Cambridge Ph.D. named Peter James who was employed as an economist in Paris. james showed Sommers a report he had written on the inevitability of American banks reducing in number through consolidation. One day, James was sure, there would be only a handful of very large banks dominating the United States economy....
the young economist informed him that the United States eventually would end up with no more than ten major banks, one of which would be North Carolina National Bank. NCNB had the right combination of location, outlook, and aggression to make it to the top.
The state legislature of New York slapped a usury ceiling law on credit card interest...who lobbied for that federal law?
In retaliation, Citibank President John Reed and his lawyers took advantage of a law passed by Congress two years earlier. This allowed banks to charge credit card interest rates based on either the prevalent rate wehre the customer lived or the prevalent rate where the bank had its credit card operations. The law did not state that those credit card operations had to be in the bank's home state. Citicorp decided it would pull its credit card operations out of New York and move them to South Dakota, where the legal interest limits were higher...
The bridge bank concept had been authorized less than a year earlier, in 1987, as part of the Competitive Equality Banking Act. The new law allowed the FDIC to issue a special charter to a bank that would assume the deposits and secured liabilities of an insolvent bank. Hartman said the law provided a way for NCNB to hold onto the tax benefits resulting from First Republic's (NCNB targeted them for acquisition) losses.
(Regarding acquisitions) "We are creating a cultural disruption in relationships," he said. "The more banks they have, the more relationships are disturbed."
"People who supply checks," Cooley elaborated, "local advertising agencies. Just by consolidating our check supplies we've probably saved more than $100 million over time in the banks we now own."