Business & Finance: Marine Midland

To George Franklin Rand, president of The Marine Trust Co. of Buffalo, last week brought the culmination of a long held ambition. To the new era of U. S. chain banking it brought the greatest development yet recorded.

“Rand” in upper New York state stands for “Banking” as much as does “Giannini” in California. Just dedicated is the Rand Building, tallest of Buffalo skyscrapers, a memorial from Banker Rand to his father, George Franklin Rand Sr.,†remembered as an able banker and a mainspring of Buffalo finance.

When Senior Rand was killed in an airplane crash in 1919, Buffalonians knew little of Junior Rand except that he was 27, had worked in all the departments of his father’s bank, served in the Y. M. C. A. during the War. Of this obscurity Banker Rand quickly divested himself. That year he became assistant secretary of The Marine Trust Co., the next year vice president. In 1921, anxious to show he could do something for himself besides running his father’s bank, Mr. Rand with some young friends acquired an interest in the Buffalo Trust Co. He was made president, soon opened many branch offices, piled up resources at a terrific clip. In 1926 the Buffalo Trust and the Marine Trust merged-and Banker Rand was elected president of all that.

Convinced of the advantages of group banking where the law prohibits branch banking, Mr. Rand acquired control of other institutions near Buffalo. For this purpose he formed the Marine Union Investors, Inc., then conceived of a super-holding company which would control banks throughout the country. Last week the super-holding company became an actuality. Banker Rand’s Marine Union Investors, Inc., together with Stone & Webster and Blodget, Inc., White, Weld & Co., Schoellkopf, Hutton & Pomeroy, Inc., announced plans for the Marine Midland Corp., to be capitalized at approximately $1,000,000,000.

Development of group banking in the U. S. has been rapid. Long a leader of the movement is the Transamerica Corp., holding company for the Giannini institutions. Of many similar organizations formed this year, largest until last week were the First Bank Stock Corp. (TIME, Sept. 2), now controlling 43 banks in the Minnesota-Montana region, with resources of $341,000,000 and the $370,000,000 Northern Bancorporation in the same region. But greatest of all will be Banker Rand’s Marine Midland Corp.

Besides the immediate acquisition of 16 banks in the state of New York,* the Ma rine Midland Corp.’s sponsors will make a public offering of stock to finance a $25,000,000 subsidiary bank to be known as the Marine Trust Co. of the City of New York and located in the financial district. While no announcement was made of how much stock would be sold to the public, trading in Marine Midland commenced on the New York Produce Exchange, the stock selling at more than 20 points over the rumored offering price of $60 per share.

Officers were announced as Mr. Rand, president, Ernest Stauffen Jr., chairman of the board of directors, Harral S. Tenney, vice president. Banker Stauffen, enthusiastic, has been a prime mover in group banking, was perhaps principal factor in formation of Marine Midland Corp. But unlike Banker Rand, Mr. Stauffen did not learn his banking behind cages and over ledgers. Graduated from Columbia in 1904, he practiced law, then became vice president in charge of finance of Lord & Taylor, Manhattan merchants. In 1915 he was made a vice president of the Liberty National Bank, kept the position when this institution was merged with The New York Trust Co., of which he is now senior vice president. Over six feet, well dressed, he likes ranches, golf, tennis, romping with younger financiers, toying with cigars.

Other directors and officers will be drawn from the banks acquired and from the firms sponsoring the corporation. Approximately $500,000,000 of the stock will be kept to provide for national expansion. Announcing the plans the organizers said: “For several years the opinion of bankers through the country has been becoming more and more favorable to the principle of group banking. . . . [It] is common in Great Britain, Canada and continental Europe … is peculiarly adapted to American conditions as it offers the advantage of maintaining a large degree of local independence and local contacts through the maintenance of the individuality of all the constituent companies. . . . This group should be one of the leaders.

†Not to be confused with his brother, the late James Henry Rand, founder of the Rand Kardex Co. which was later merged (1927) to form Remington Rand, Inc., manufacturers of office equipment. Board chairman of Remington Rand, Inc. now is James Henry Rand Jr., cooperating cousin of Banker George Franklin Rand.

* Banks to be immediately acquired are: The Marine Trust Co. of Buffalo; Union Trust Co. of Rochester; Manufacturers National Bank of Troy; Cortlant Trust Co., Cortlant; Lackawanna National Bank, Lackawanna; Niagara Falls Trust Co., Niagara Falls; Niagara County National Bank and Trust Co., Lockport; State Trust Co., North Tonawanda; Workers Trust Co., Johnson City; The Bank of East Aurora, East Aurora; Bank of La Salle, Niagara Falls; First Trust Co., Tonawanda; Peoples Trust Co., Binghamton; Union Trust Co., Jamestown; Orleans County Trust Co., Albion; Bank of Snyder, Snyder.