At It Again

As the bureaucrat presiding over the nation's 4,815 national banks, Comptroller of the Currency James Joseph Saxon, 52, has swept away a lot of regulatory cobwebs, irritated two U.S. Presidents, feuded with much of the industry he regulates, and bickered with every other federal body involved in bank supervision: the Federal Reserve, the Federal Deposit Insurance Corp., the Securities and Exchange Commission and the Justice Department. Last week Arkansas Democrat John L. McClellan and his Senate investigation subcommittee lit into Jim Saxon--who naturally lit right back into McClellan.

Con Men & Raiders. In a report based on a series of hearings last year, the subcommittee asserted that Saxon's policy of liberal charters for new banks had attracted financial raiders, confidence men and other "unscrupulous and corrupt persons" into banking. The subcommittee was especially critical of Saxon's role in the events leading to the 1965 failure of the San Francisco National Bank, whose charter had been approved by Saxon's predecessor. The McClellan group thought it "inexplicable" that Saxon had withheld information about the bank's perilous condition from the Federal Reserve, which was advancing it money, and from the F.D.I.C., which will be forced to pay millions of dollars to depositors. The subcommittee also labeled it "beyond understanding" that Saxon had waited eight months before sending the Justice Department a letter from one of his bank examiners detailing criminal hanky-panky at the bank.

Saxon responded with characteristic disdain. "McClellan's basic opposition," he said--pointedly omitting the conventional courtesy of a prefixed "Senator" or "Mr."--"has been to the chartering of new national banks, particularly in Arkansas." He dismissed the report itself as "a phonographic repetition of the same exaggerated allegations we have previously answered in full." Retorted McClellan: "Suppose I do own a little bank stock. Does that justify Saxon's inefficiencies?"

Putts on the Carpet. The Toledo-born son of a white-collar employee of the Chesapeake & Ohio Railway, Saxon once studied for the Catholic priesthood but switched, first to economics and later to law, in which he earned a degree at Georgetown University ('50) while working for the Treasury Department. In 1952, he became assistant to Stephen A. Mitchell, then chairman of the Democratic National Committee. He spent the eight Eisenhower years as assistant general counsel for the American Bankers Association and later as an attorney for First National Bank of Chicago. President Kennedy named him comptroller of the currency and gave him orders to start stirring things up. Saxon tripped at the outset by tangling with Bobby Kennedy's antitrust division at the Justice Department--but patched up the quarrel before he endangered his tenure.

As fastidious as he is cocky, Saxon likes shirts with detachable collars and French cuffs, and finely tailored dark suits complete with a three-pointed, breast-pocket handkerchief. Having tapered off from the twelve-hour working days that used to dazzle his staff, he now finds time to practice golf putts on his office carpet. "We've brought competition into the banking business," he maintains, "and we're shaking up those small monopoly people who don't have to give good service to their customers. If I'd consulted with everybody, we'd still be in the doldrums."

However embarrassing it may be to consensus-minded Lyndon Johnson to have such a maverick repeatedly embroiled in public acrimony, Saxon has his admirers--among them the directors of the 500 new banks he has chartered. A President can fire the comptroller, but that would be almost certain to start a squabble. The word in Washington is that Johnson will let Saxon's five-year term of office expire in 1967--and pick a quiet successor.

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