income housing. We should not, in any case, place more than a minimal portion of bank funds in housing mortgages of any kind, which are notorious for their low return of profit.
'Another way not to achieve profitability is by making concessions and lowering lending standards as, for example, with so-called minority business loans. This is an area nowadays where banks are subjected to enormous pressures and we should resist them, not with racial motives but with business shrewdness. By all means let us make minority loans when possible, but let terms and standards be as strict as those for any other borrower.
'Nor, as a bank should we concern ourselves unduly with vague matters of environment. It is not our business to pass judgment on the way our customers conduct their business vis-a-vis ecology; all we ask is that they be in good financial health.
'In short, we do not achieve profitability by becoming our brother's keeper or his judge or jailer.
'Oh, at times we may support these public objectives with our voice low-cost housing, civic rehabilitation, improvement of environment, energy, conservation, and other issues which arise. After all, this bank has influence and prestige which we can lend without financial loss. We can even allocate token amounts of money, and we have a public relations department to make our contributions known even,' he chuckled, 'to exaggerate them on occasions. But for real profitability we should direct our major thrust elsewhere.'
Alex Vandervoort thought: Whatever criticism might be leveled at Heyward, no one could complain later that he had failed to make his viewpoints dear. In a way his statement was an honest declaration. Yet it was also shrewdly, even cynically, calculated.
Many leaders in business and finance including a good proportion of the directors in the room chafed at restrictions on their freedom to make money. They resented, too, the need to be circumspect in public utterances lest they draw fire from consumer groups or other business critics. Thus it was a relief to hear their inner convictions spoken aloud and unequivocally.
Clearly, Roscoe Heyward had considered this. He had also, Alex was certain, counted heads around the boardroom table, calculating who would vote which way, before committing himself. But Alex had made his own calculations. He still believed a middle group of directors existed, sufficiently strong to swing this meeting from Heyward toward himself. But they would have to be persuaded.
'Specifically,' Heyward declared, 'this bank should depend, as it has traditionally, on its business with American industry. By that I mean the type of industry with a proven record of high profits which will, in turn, enhance our own.
'Expressed another way, I am convinced that First Mercantile American Bank has, at present, an insufficient proportion of its funds available for large loans to industry, and we should embark immediately on a program of increasing such lending
It was a familiar script which Roscoe Heyward, Alex Vandervoort, and Ben Rosselli had debated often in the past. The arguments which Heyward now advanced were not new, though he presented them convincingly, using figures and charts. Alex sensed the directors were impressed.
Heyward talked for another thirty minutes on his theme of expanded industrial lending against a contraction in community commitments. He ended with as he put it 'an appeal to reason.'
'What is needed most today in banking is pragmatic leadership. The kind of leadership which will not be swayed by emotion or pressured into 'soft' uses of money because of public clamor. As bankers, we must insist on saying 'no' when our fiscal view is negative, 'yes' when we foresee a profit. We must never buy easy popularity at stockholders' expense. Instead we should lend our own and our depositors' money solely on the basis of the best return and if, as a result of such policies, we are described as 'hard-nosed bankers,' So be it. I am one who will be glad to be counted among that number.' Heyward sat down amid applause.
'Mr. Chairmanl' The steel-man, Leonard Kingswood, leaned forward with a hand raised. 'I've several questions and some disagreement.'
From lower down the table the Honorable Harold Austin riposted, 'For the record, Mr. Chairman, I have no questions and total agreement with everything presented so far.'
Laughter erupted and a fresh voice that of Philip Johannsen, president of MidContinent Rubber added, 'I'm with you, Harold. I agree it's time we took a harder line.' Someone else injected, 'Me, too.'
'Gentlemen, gentlemen.' Jerome Patterton rapped lightly with his gavel. 'Only part of our business is concluded. I'll allow time for questions later; as for disagreement, I suggest we save that until our discussion when Roscoe and Alex have withdrawn. First, though, let's hear Alex.'
'Most of you know me well, as a man and as a banker,' Alex began. He stood at the boardroom table casually, shoulders slightly hunched as usual, leaning forward momentarily to catch sight of those directors on his right and left as well as others facing him. He let his tone stay conversational.
'You also know, or should, that as a banker I am tough hard-nosed, if anyone prefers that word. Proof -of this exists in financing I've conducted for FMA, all of it profitable, none involving loss. Obviously in banking like any other business, when you deal from profitability you deal from strength. That applies to people in banking, too.
'I'm glad, though, that Roscoe brought up this subject because it gives me an opportunity to declare my own belief in profitability. Ditto for freedom, democracy, love, and motherhood.'
Someone chuckled. Alex responded with an easy smile. He pushed the chair behind him farther back to give himself a few paces of free movement.
'Something else about our profitability here at FMA is that it should be drastically improved. More about that later. 'For the moment I'd like to stay with beliefs.
'A belief of my own is that civilization in this decade is changing more meaningfully and quickly than at any other time since the Industrial Revolution. What we are seeing and sharing is a social revolution of conscience and behavior. 'A few don't like this revolution; personally I do. But like it or not, it's here; it exists; it will not reverse itself or go away.
'For the driving force behind what's happening is the determination of a majority of people to improve the quality of life, to stop spoliation of our environment and to preserve what's left of resources of all kinds. Because of this, new standards are being demanded of industry and business so that the name of the game is 'corporate social responsibility.' What's more, higher standards of responsibility are being achieved and without significant loss of profits.'
Alex moved restlessly in the limited space behind the boardroom table. He wondered if he should meet another of Heyward's challenges head on, then decided, yes.
'In the matter of responsibility and involvement, Roscoe introduced the subject of his church. He told us that those who have as he puts it 'regained control' are opting out and favoring a policy of non-involvement. Well, in my opinion, Roscoe and his churchmen are marching resolutely backwards. Their attitude is neither good for Christianity nor banking.'
Heyward shot up straight. He protested, 'That's unpleasantly personal and a misinterpretation.' Alex said calmly, 'I don't believe it's either.'
Harold Austin rapped sharply with his knuckles. 'Mr. Chairman, I object to Alex's descent to personalities.'
'Roscoe dragged in his church,' Alex argued. 'I'm Simply commenting.'
'Maybe you'd better not.' The voice of Philip Johannsen cut sharply, unpleasantly, across the table. 'Otherwise we might judge the two of you by the company you keep, which would put Roscoe and his church way out ahead.' Alex flushed. 'May I ask exactly what that means?'
Johannsen shrugged. 'The way I hear it, your closest lady friend, in your wife's absence, is a left-wing activist. Maybe that's why you like involvement.'
Jerome Patterton pounded with his gavel, this time forcefully. 'That's sufficient, gentlemen. The Chair instructs there will be no more references of this kind, either way.'
Johannsen was smiling. Despite the ruling, he had made his point.
Alex Vandervoort, seething, considered a firm statement that his private life was his own affair, then he rejected the idea. Some other time it might be necessary. Not now. He realized he had made a bad mistake by returning to Heyward's church analogy.
'I'd like to get back,' he said, 'to my original contention: How, as bankers, can we afford to ignore this changing scene? To attempt to do so is like standing in a gale, pretending the wind does not exist.
'On pragmatic, financial grounds alone we cannot opt out. As those around this table know from personal experience, business success is never achieved by ignoring change, but by anticipating and adapting to it. Thus, as
