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Small-town banks, many of which have grown fat and lazy under laws protecting them from competition, spearhead the fight against expansion of city banks. Controller Saxon, despite his New York decision, is a big-bank man from Chicago and wants the power to approve expansion of the national banks under his authority, regardless of state laws. The small banks, with their powerful voices in Washington as well as in the state capitals, should have no trouble defeating Saxon's proposal this time. But First National City President George S. Moore is sure that eventually there will be a federal law that sets national standards for branching.
"The country is too big and our economy too interrelated for banks to be inhibited in their growth," he says. "The last thing I want to see is nationwide branching, but I think eventually we'll see statewide branching, and I think we should be allowed to branch within logical economic trading areas and not be limited by state lines."
Man on the Spot. Balked in their attempts to expand at home, big city banks have increased their interest in expansion abroad. First National City, which already has 92 branches abroad, began operating its new Brussels branch last month even before the upper floors of the building were finished, and will open another new branch in Milan next week. The Bank of America (95 branches abroad) will invade Amsterdam next month, and bankers predict that "First National City is sure to follow."
David Rockefeller and the Chase are expanding just as eagerly abroad, but in a different way. The Chase has 28 foreign branches of its own, but more important, it has a globe-encircling string of 50,000 correspondent banking offices. It acts as a clearinghouse for them, lending them money when they need funds for local borrowers and providing a host of worldwide services for them in exchange for the use of funds deposited with it by the correspondents. Rockefeller frequently hops about the world cementing the Chase's relations with its correspondents and encouraging them to be more openhanded with loans to good local risks. On a visit to Manila last spring, he quickly had Philippines bankers calling him "David" (he is not the sort to be called Dave), and gave President Macapagal his personal assurance that the Chase would support the Philippines' economic program with hard cash. In Malaya he assured Prime Minister Tengku Abdul Rahman that the Chase would back the new federation of Malaysia with investment capital. And in Panama, where a top government official says the Chase's loans to cattle raisers "have done more for Panama's cattle industry than all government agencies put together," David, in sports shirt, tried his hand at branding cattle.