Bunting's Bet

When it comes to making important changes in interest rates, the big-time bankers of New York, Chicago and San Francisco have recently taken a back seat to Philadelphia's John R. Bunting, the controversial chief of the First Pennsylvania Banking & Trust Co. On two occasions in 1968 and 1970, Bunting was the first to cut the prime rate, and other bankers quickly followed. Last week, ignoring pleas and pressure from the Nixon Administration, Bunting acted again. This time he hiked the prime, from 5 1/2% to 5 3/4%. By week's end Bunting was out on a long limb, because no other major banks had followed. Still, he was unworried, figuring that the general rise of other interest rates will soon bring the other banks around. As he told TIME Correspondent John Tompkins: "I like to do things that others consider risky--when I have an 80% chance of winning."

Earth Bonds. By word and deed, Bunting, who is 45, has often shaken up the banking establishment. He has accused other bankers of discriminatory hiring practices, and has made plans to add a woman, a black, a priest and a consumer activist to First Pennsylvania's board. He would like the Federal Reserve Board to have a double standard for reserve requirements, enabling banks to provide special low-cost loans for socially useful projects, including construction in housing-short areas and black business development. Last year his bank introduced "Earth Bonds," a form of savings bonds, with most proceeds going to programs aimed at controlling air pollution. But the bonds did not go over well, because they were sold primarily to low-earning young buyers. Bunting was more successful when he had First Pennsylvania lend money to the producers of the movie Joe. The bank got 12% interest on the loan plus $13,000 in warrants; they are now worth $138,000 and Bunting is still holding on to them, believing that they will jump much higher.

For fear of creating conflicts of interest, Bunting makes no personal investments for himself, nor has he accepted appointments to any corporate boards since he became the bank's president in 1968. "Bankers are invited onto boards for the wrong reason," he says. "The company chiefs think that such appointments ensure them a line of credit." He often criticizes politicians as well as businessmen. Bunting, who calls himself a liberal independent, says, "I travel in Republican circles, but I can't find many Nixon supporters."

Radical Changes. A non-Main Liner Philadelphian who worked for 14 years as a Federal Reserve economist before joining the bank in 1964, Bunting believes that radical changes, especially in corporations, are inevitable in the 1970s. "I'd just like them to be as evolutionary as possible," he says. Bunting can take some unusual stands, largely because he is, by most measures, a highly successful moneymaker. Since he has become president, the bank has increased assets from $2.7 billion to $3.9 billion. The Wall Street brokerage firm of Eastman Dillon has just issued an investment report that praises the bank and Bunting, because "his decisions have proved farsighted and profitable." In particular. Eastman Dillon notes that he has raised the bank's earnings potential by acquiring mortgage and consumer finance firms, and has drawn valuable attention to the bank by making his much-heralded changes in the prime rate.

This file is automatically generated by a robot program, so reader's discretion is required.