BANKING: Mother-in-Law Trouble

Like a bride left waiting at church, the World Bank was still looking for a president. Worried over its loss of prestige, the Bank last week desperately ogled another candidate: John Jay McCloy, 51, high-priced Manhattan lawyer who had been an efficient Assistant Secretary of War under Henry L. Stimson.

McCloy liked the president’s title and the $30,000-a-year tax-free salary; he was on the point of saying “I do.” But, like other eligible candidates before him, he got nervous when he saw the bride’s family. The Bank’s twelve full-time executive directors wear the Bank’s pants—like twelve mothers-in-law. The president (under the Bretton Woods regulations) does little more than take orders. If he wants to do anything on his own, he must dutifully explain all about it to the directors. Many people thought the president should have more power to go with his responsibilities; nobody quite knew how to arrange it without revising Bretton Woods.

Of the mothers-in-law, none might be more difficult than the U.S.’s own Emilio Gabriel Collado. A Harvard Ph.D. with a bright record as a troubleshooting economist for the Treasury and State Departments, hefty little “Pete” Collado, 36, was generally regarded as a good choice for the directorship when he was appointed last spring.

Off the List? But Prospective Groom McCloy was well aware that, among knowing Washingtonians, young Mr. Collado’s increasing fondness for having his own way was generally looked upon as one of the chief reasons why Publisher-Banker Eugene Meyer quit the presidency two months ago. With backing from the National Advisory Council, the Government agency set up to watch over the big U.S. investment in the Bank (nearly 35% of its stock), Collado apparently felt that he was strong enough to get what he wanted—even if the president wanted something else. One thing Meyer especially feared was that, if he did not have more control, loans would be granted not on their financial merits but on the basis of U.S. foreign trade policy. If such loans went sour, the president would be the handiest person to blame.

At week’s end, John McCloy had still not made up his mind. But the longer the Bank’s presidency remained unfilled, the gloomier grew prospects for floating the billions in securities needed to finance world reconstruction. Private bankers, lukewarm at best, had now cooled to the whole project. The World Bank’s prestige had fallen so low that some Manhattan bankers talked about getting the unissued securities stricken from New York State’s “legal list,” i.e., the list of securities in which savings banks may invest.