In lieu of an abstract, here is a brief excerpt of the content:

Chapter 7 solidifying the base, 1968–72 My broader responsibilities as president gave me the opportunity to extend throughout the bank the organizational structure, the of- ficer calling program, the quantified goals, and the budgets that had worked so productively in the Houston Metropolitan Division. I worked with Chairman John Whitmore and a good group of officers to broaden the bank’s marketing program, open new lines of customer communication , and further consolidate and coordinate the still-feuding internal NBC and TNB camps. We also recruited and trained extraordinarily smart young managers who had excelled academically prior to joining TCB. In this way, we increased our ability to compete with the giant money center banks. A healthy economy is the single most critical factor in the success of any bank. Between 1968 and 1972, Texas Commerce was operating in the healthiest economy in the nation. Real estate construction was probably the most visible growth industry of this period; it was hard to overlook the complete generation of downtown skyscrapers it produced. Houston’s new big city skyline fit its rank as the nation’s sixth-largest city in 1970, one with an increasingly diverse economy that could no longer be easily categorized as cottonor oil-based. Oil had been the glamour industry of the southwestern states immediately after World War II, but a sustained decline in exploration and production began in the early 1970s as petroleum deposits in the Middle East proved larger, easier to find, and less expensive to bring out of the ground. Although local oil production was not the business it had been, the expertise and infrastructure for this by-now international industry was increasingly headquartered in Houston. A boom in the cross-country shipment of natural gas came after the war, and the largest natural gas transmission companies were based in Houston. The war effort also incubated a vast petrochemical complex in Houston, one that accelerated its growth after the war and made the city the geographic center of one of the nation’s fastest expanding industries. The bank was well positioned to take advantage of the resulting opportunities . An excellent group of bank officers led the way. The urbane Lew Brown moved from National to head Houston Southwest, while Charlie Beall, an Ole Miss gentleman and scholar, was promoted to manage the National Division . Correspondent Banking was led by Grant Byus, who had run small banks and understood them well. John Townley, a shrewd, hardheaded Aggie petroleum engineer, followed E. O. Buck as head of the Energy Division. W. N. (Bill) Davis put his impressive industry experience to work managing the new Chemical Division. Family Banking was run by Warner Rogers, an exceptionally innovative retail banker with finance company managerial seasoning . The courtly George Ebanks, one of the first Texas bankers to travel to Japan after World War II, was in charge of International and reported to Bob Gerrard. George ran a one-man show and did a notable job, considering his limited resources in manpower, comparative competitive size, and locations. Real Estate was managed by Lloyd Bolton, a man of uncommon common sense, who reported to John Whitmore. ★ building on traditional strengths in energy and real estate Oil lending at TCB did not dip as dramatically as the drilling rig count in the 1970s because the bank generally made loans secured by proved producing reserves, rather than more speculative loans related to drilling for oil. John Townley’s division also lent to such energy service giants as Hughes Tool Company and Schlumberger. Pipeline and transportation companies constituted another important component of his division’s portfolio. We made very few loans secured by drilling rigs. As a matter of fact, if a young officer brought a rig loan application to vice chairman E. O. Buck, he referred that officer to the junkyard to get the price of scrap iron, because Buck, a veteran of the oil patch before he became a veteran oil banker, declared that a rig would be worth only its weight in scrap iron during the inevitable cyclical drilling bust. With local oil production on the wane, TCB looked within the industry for other opportunities and found that the Texas Gulf Coast plants were producing 40 percent of the nation’s petrochemical supplies. John Whitmore tapped Bill Davis, an experienced chemical engineer, to build a new Chemical Division around several accounts previously served by the Energy and National divisions. Bill joined the bank in 1967, about the...

Share