Unorthodox Yankee

"Money has to be sold the same way that suits and dresses are." Today that slogan is a banker's commonplace. Yet when young Lewis Douglas Meredith argued the point in his Ph.D. thesis at Yale in 1933, it was far from accepted doctrine. Bankers sat on their funds, lent only on the highest-grade collateral. Meredith began developing the idea that, instead of looking mainly to collateral, the loanmakers should consider a man's job and his ability to repay. A mortgage, he argued, is not just a lien on property, but "instead is a means of raising the standard of living."

Shortly after writing his thesis, Financier Meredith got a chance to prove his case. He joined Vermont's staid old (108 years) National Life Insurance Co., pioneered so many fields for investment that National Life has wielded an influence far beyond its $620 million assets. Last week Meredith, now 51, and National Life's executive vice president, got another selling job. He became president of the New England Council, a post previously held by such eminent New Englanders as former Boston Federal Reserve President Laurence F. Whittemore and Senator Ralph E. Flanders. His task: to bind together the diverse elements of New England's economy into a cohesive unit.

Modern Banking. The job was tailor-made for Meredith. All through his career --assistant professor of economics at Vermont University, Vermont State banking and insurance commissioner--he has been busy improvising modern banking methods for modern days. Joining National Life in 1935 as an investment analyst, he arrived shortly after the New Deal brought out its Federal Housing Administration to spur home building. While other money men cried socialism and hung back, Meredith turned National Life to investing in FHA, by 1946 had 42% of its money in government mortgages.

A string of other firsts followed. In 1945, as housing boomed, Meredith turned National Life to the package mortgage, permitting cash-short house buyers to tack appliances onto the house purchase price. An estimated half the mortgages written are now package mortgages.

Modern Developments. Meredith pioneered again when National Life became the first life-insurance company to offer open-end mortgages (i.e., letting homeowners reopen their mortgages to add the cost of home improvements) on a nationwide basis. It attracted widespread interest; again, about half the new mortgages are open-end.

Meredith's newest idea is mortgages on automobile house trailers. Though many bankers consider trailer owners poor risks, Meredith argues, "Most of them are pretty solid--a lot are retired people who want to travel a little, and a lot are skilled and highly paid workers who have to go from one job to another.'' In 27 months National Life has lent $15 million at 5% and 6%. Total loss to date: $75. Says Meredith: "You have to keep up with modern developments."

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