Revolt in New Orleans

After the annual meeting of the American Bankers Association in Washington last year, most of the delegates packed up for home feeling that they had been cheated out of a just revenge for two years of New Deal badgering. Itching to stick out their tongues at Franklin D. Roosevelt, they had been muzzled just at the moment when the President might have noticed them. Instead of offering defiance, the ABA officially proffered peace in a dramatic speech from Jackson Eli Reynolds of Manhattan's First National Bank (TIME, Nov. 5, 1934). As far as rank & file ABA members were concerned, the famed "truce with the White House" was rammed down their gullets.

Last week the nation's bankers met again, this time in New Orleans, home town of retiring ABA President Rudolf S. Hecht. The climate was milder, the bankers bolder, the New Dealers more conciliatory.

President Roosevelt dispatched greetings to the 3,500 ABA delegates through RFChairman Jesse Jones, writing: "I am gratified ... to know that all banks are now in a strong position, and I hope they will take full advantage of the new Banking Act. . . ."

The President's emissary gloomed paternally about railroads, took a few digs at their "banker management," then seconded his chief's plea for bigger & better lending. "Since real estate is the basis of all wealth and industry the most essential factor in employment," pleaded Mr. Jones, "these should have, to a reasonable and safe extent, favored treatment by banks in making loans." The bankers had heard that tune before from Jesse Jones, and when he finished his address, the RF Chairman grinned, drawling:

quot;You know what I think of you bankers? I think you're a swell lot of guys. Some of you are afraid of your own shadow and wouldn't lend $10 on a $20 bill, and I'm looking right at. . . ." Mr. Jones stopped but eyed a fellow citizen of his native Houston. The bankers roared. "You notice I didn't say $20 gold piece," the burly Texan added. "I don't know what is ahead either but I know what is behind us. I know there's plenty of meat in the smokehouse and flour in the barrel and, whatever it is, we'll lick it somehow."

Mr. Jones's hearty reassurances notwithstanding, the bankers were almost unanimously agreed that the chances of licking whatever was ahead would be considerably enhanced by a change in Administration. They were honestly worried about Federal deficits, Federal spending, the steady encroachment of Federal regulation and control. They were incensed about taxes (see col. 3). They wanted the Government to get out of business, particularly the money-lending business. They deplored the growing popularity of the spend-our-way-to-prosperity theory. They hoped that the new Federal Reserve Board when appointed would turn out to be a true banking "Supreme Court."

For 1937. In effect, ABA presidents are selected two years before they take office. President Robert Vedder Fleming, who was elected last week, was named as second vice president in 1933, moved up to first vice president last year. Picking a second vice president is usually as routine as the traditional succession. This year, for the first time since 1912, the delegates repudiated the official candidate in a hot fight on the floor.

The campaign quickly shaped up as a contest between two Utah bankers--one a genuine New Dealer who had served in the Administration, the other a fire-eating foe of the New Deal and all its works.

Elbert Gladstone Bennett is a close friend and business associate of his fellow townsman, Reserve Board Governor Marriner Stoddard Eccles. Stout, white-haired at 47, Banker Bennett is vice president of Salt Lake's First National, head of the Eccles chain of 28 banks in Utah, Idaho and Wyoming. For a short time he served in Federal Deposit Insurance Corp. He is not a Mormon.

Orval Webster Adams is vice president of Utah State National Bank, a pillar in Mormon affairs and a power in local banking and politics. Tall, heavy, popular, he is 52 and father of six sons. Bankers Bennett & Adams are good friends socially but not in business. Ostensibly the issue between them in New Orleans last week was the old ABA skeleton, unit v. branch banking.

But the real issue was the New Deal, and if any delegate thought otherwise he was soon disabused of his misconception by Orval Adams, who unofficially keynoted the convention with a savage attack on Administration policy, urging a bankers' boycott of Treasury securities, damning the ABA for its policy of peace. Cried he:

"Through our silence ... we will be branded as modern Attilas plundering and pillaging the people, and as having betrayed our sacred trust. ... So long as we remain mute, denunciation will be hurled at us by those who are assiduously broadcasting the seeds of banker distrust. . . .

"As long as the Federal Government can get money without limit, it will spend without limit. ... As long as this reckless public spending continues, private business will remain in its cyclone cellar. . . . This is a disease. We must provide the remedy. . . . Since it [the Government] cannot spend without using the bankable funds of the nation, it is up to us to declare an embargo. We must decline to make further purchases [of Gov- ernment securities]."

Already holding 60% of the national debt, the bankers well knew that Banker Adams' proposal was too explosive to touch. But hundreds of delegates who despised the ABA's meek official attitude swung to his support. When Mr. Adams was nominated from the floor in opposition to Banker Bennett, a banker from Wichita, Kans. jumped up to second him. Then delegates all over the floor of the Orpheum Theatre, where general sessions were held, leaped to their feet--bankers from Canton, Ga.; Doty, Tex.; Hannibal, Mo.; Elmira, N. Y.; Green Bay, Wis.; Grand Rapids, Mich.

Before balloting could start, the meeting had to make way for the afternoon cinema show, and arrangements were made to install polls in the mezzanine of the Hotel Roosevelt. But soon Banker Bennett withdrew his name, and next day Banker Adams was elected second vice president by acclaim. The little bankers had been avenged for last year's convention.

Banker Adams will be preceded in office by Tom K. Smith of Boatmen's National Bank in St. Louis, who is now first vice president and close enough to the New Deal to have served for a while under Secretary Morgenthau of the Treasury. Thus, until after the next Presidential election the ABA will be directed by New Deal friends. As head of Riggs National, biggest bank in Washington, 1937 President Robert V. Fleming has played ball with the Treasury, the RFC, Home Owners Loan Corp. He made a point of sponsoring Marriner Eccles before local banking associations. An assiduous joiner, he is 45. bald, able, convivial, something of an institution in the Capital's social scene.

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