Is it possible to like your banker?
If any writer can make finance interesting, it’s Ron Chernow, author of the celebrated Alexander Hamilton (2004). One way he worked his magic in an earlier book on the history of finance was to assign it a title bound to delight many readers: The Death of the Banker (1997). He narrates his story with colorful anecdotes about American tycoons of the nineteenth and twentieth centuries, most notably J.P. Morgan, who would confine influential people on board his boat or in a museum room until they found themselves in agreement with him. The book’s last section is a portrait of the Warburg family, originally German-Jewish, who went on to financial success and even bigger public service in the United States and England. Indeed, this 130-page book is a kind of precis of his previous extended biographies of Morgan and the Warburgs. A crucial aspect of the Warburg section is the notion of relationship banking. The London Warburg, Siegmund, sought to befriend the people to whom he extended loans. In a somewhat similar vein, Morgan’s lending decisions were based on his assessment of a man’s character, albeit the criteria he used wouldn’t necessarily be acceptable today.
This morning, as I near the end of Chernow’s book, the New York Times has published an obituary of Joseph Rice, the former head of Irving Trust, a New York bank that resisted a 1987 takeover bid from Bank of New York, only to succumb the next year. The article brought back unexpected memories.
When I arrived in the city after graduating from law school, I opened an account at my local Brooklyn branch of Citibank and waited not so patiently to receive a checkbook. As a blind lawyer starting out long before the Americans with Disabilities Act, I, not my employer, paid my readers. In order to maintain a record of these payments and to avoid carrying more cash than needed to placate potential muggers, I required checks. A week went by, then a second, and still no checkbook from Citibank, despite my numerous calls and visits.
On my way to the office each morning, I walked past a Manhattan branch of Irving Trust. One day, I went inside. A man called me over to his desk, and I explained my difficulty. He assured me his bank would get me checks right away. He was as good as his word.
From that day on, I stopped in every other week to deposit my paycheck. (Direct deposit was a thing of the future, at least with my employer.) Each time, I was spared a bank teller line. Instead, the same man summoned me to his desk and we’d have a short chat. My pay was paltry even by 1979 standards: $15,000 until I passed the bar, then a not-exactly-munificent $18,000. Not only that, but prejudice against disability was alive and well in moneyed institutions. Two years before, a Harvard Law doctoral candidate friend of mine who was also blind had sent resumes to twenty law firms. In ten of them, she mentioned her disability; in the other ten, she didn’t. Every firm she alerted to her disability rejected her, every firm she didn’t set up an interview. In that sense, I was fortunate because my ambitions lay with public service, where a lawyer could have no expectations of a high salary. But it meant I was an unlikely candidate for special treatment by a bank. Not only was I making a relative pittance; I could have few illusions about one day making a fortune. Of course, I said none of this to my unofficial personal banker at Irving Trust. Regardless, he treated me and my modest income not as royalty and certainly not servilely, but with unfailing civility.
This morning’s obituary brings that man back to mind for the first time in many years. It frustrates me that I can’t recall his name, nor what we talked about. I just have a sense of his presence. I’m guessing he was in his forties, although a twenty-five-year-old is a poor judge of older people’s ages. He was warm without being overly effusive, and I looked forward to doing business with him.
Chernow finds much to admire in the old bankers, but also much to criticize, along with much positive in the state of today’s financial world. In the days of Morgan and the Warburgs, finance was a secretive affair. Corporations kept their books to themselves. When they had to share information with their banker lenders, the bankers kept their secrets. Ordinary investors, to the extent they participated at all in the stock market, had little or no information with which to make investment decisions. By contrast, today’s so-called retail investment has made it possible for millions of middle class people to participate in the market and to find as much information as they care to acquire. Although The Death of the Banker came out twenty years ago, it remains relevant.
As each era passes, it invariably leaves behind its particular nostalgia. One generation looks back fondly at the age of steam trains, even though they damaged the environment and were bad for the lungs. Aging tech buffs reminisce about computers whose storage capacity was measured not in terabytes, not even gigabytes, but double-digit megabytes. After all, they made rapid-fire convenience of many mundane, formerly time-consuming tasks.
The era of the individual investor was only just beginning in 1979. Today, if you have a big enough account at a bank or brokerage house, you will get a degree of personal attention. Otherwise, you can expect to stay on hold interminably for a front-line telephone service rep. But at least you have the opportunity to invest and, if you do your research and manage your emotions, you can grow a nest egg.
So I don’t think about my Irving Trust banker with the self-deluding belief that things were better in the old days. In some ways they were, in others they weren’t. Even back then, Citibank was probably nearer the norm than Irving Trust. Still, I remember that banker with fondness and nostalgia. I’m not sure his taking time with a lowly customer would be tolerated today.
An aside: I waited three months before Citibank finally sent me a checkbook, and then I promptly closed the account.
Is it possible to like your banker? Yes. Just as Chernow brought back good memories for Adrian Spratt, Adrian opened a long-shuttered window on my own banking past. Samuel Kronenberg. At Bank of Commerce. I remember his name well, but unlike Adrian, I never met my kind banker in person — only on the phone. He was stationed at the Bronx offices of the bank — ultima Thule for a 20 something Manhattanite. I’ve long forgotten how I came to connect with this nice man. I needed to borrow a few thousand dollars — why, I have no recall. I had a checking account at Chemical Bank, and they were of no help. Of course. Talk about paltry earnings. I was working for Philip Morris as a writer of various business matters, a young woman, so making less than my male counterparts. Maybe $60 a week. Perhaps a friend recommended Bank of Commerce. As a young person Mr. Kronenberg was always Mr. Kronenberg to me. He authorized a small loan. Once I ditched Chemical (hooray) he kept a benign eye on my checking account and would call me up if a draft on the account arrived before the deposit. He would hold the check instead of bouncing it. Imagine. Like Irving Trust, Bank of Commerce was swallowed by a series of other institutions over the years — BankAmerica, Norwest, Fleet among others. Now it’s Bank of America.
Because I am so fascinated by medieval history I wondered if Adrian’s comment about the Warburg’s unusual policy of befriending borrowers might show a thread spiraling back to the12th century. Is it possible that Jewish money lenders tried to be friendly to the cruel European aristocrats who used their money to finance their ridiculous wars and crusades in an effort to deflect their unconscionable persecution? Dukes and such borrowing money and then murdering the bankers to avoid repaying it. Hard to read the many accounts of how these early bankers were tortured and abused. Almost enough to make one a little bit sympathetic to Goldman-Sachs. (Just kidding about that.)
Thank you, Susan, for your description of a somewhat similar experience with another banker and good man. I’m glad you brought up the difficulties young, perhaps typically single, women used to have working with financial institutions, which undoubtedly gave you a special appreciation of Samuel Kronenberg’s considerate treatment. In my essay, I hesitated to bring up disability and risk seeming to find prejudice wherever I turn. Disability probably made little, if any, difference in how my banker treated me. However, having encountered resistance in the moneyed world, I couldn’t help but be especially touched by his courtesy.
On the Jewish experience, Chernow writes about how Jewish lenders to powerful people during the Middle Ages had to be “both proud and officious, assertive and cautious—a walking contradiction.” A while ago, Mark Cohen’s Under Crescent and Cross , an absorbing study of the different ways Christian and Muslim societies treated Jews, gave me a sense both of Jewish life in that time and how anti-Semitism could grow and fester. As I read his book, Cohen suggests that most business in Medieval northern Europe was initially done on a “barter” basis, with local goods being exchanged for other local goods. When traders came along with exotic products from other parts of the world, a heightened role for money and an increasing role of credit followed, hence the need for moneylenders. The traders and moneylenders were often foreigners, strangers—aliens—and often these aliens were Jews, making a living in a few of the ways permitted to them under Medieval Christianity. Medieval Christianity’s condemnation of moneylending cast those who practiced it in a sinister light. (I hope I’ve done Cohen justice.) Chernow explores this distressing theme from a little later in the Middle Ages in Death of the Banker And, of course, also in his book-length treatment The Warburgs.