Snake Timeline Two

New bank born in New York

Story Image 1812
New bank born in New York
In 1811, a group of merchants takes the first steps towards setting up a new bank to help New York compete with rivals Philadelphia, Boston, and Baltimore
As debate on the renewal of the Bank of the United States charter continued into 1811, some New York merchants who were aligned with U.S. President James Madison applied to set up a new bank.

 Noting that it was easier to do banking in Philadelphia, Boston, and Baltimore than in New York, they petitioned the state assembly on February 11, "praying to be incorporated as a banking company." 

They had to wait over a year to see their wishes fulfilled. The first setback came on March 22. Vice President George Clinton's faction in the state assembly defeated the petition.

 When it reconvened in 1812, the assembly then faced petitions for the establishment of two more banks from merchants aligned with Clinton and associates of the former Bank of the United States.

 Enter one Samuel Osgood, elder statesman. He had a plan. The state lawmakers would support the original petition from 1811.

 He himself would be appointed president of the new bank. 

The original merchants aligned with Madison would secure half the remaining seats on the board, while the rest would go to the new group of merchants who supported Clinton. 

Now with broader backing, the charter sailed through the state assembly and, on June 16, 1812, City Bank of New York came into existence. 

Though Clinton had died of a heart attack three months earlier, his supporters now controlled almost half of the board of the new bank in his home state. 

With the passing of the charter, the 200-year story of Citibank began. 


A valuable client
John Jacob Astor strongly opposed renewing the charter of the Bank of the United States in 1811. 

For reasons that are not entirely clear, the bank had closed his account and refused him further credit. 

Two decades later he was a customer and then, records suggest, rescuer of City Bank, by which time most of his fortune was in real estate.

 Astor also held shares in Farmers' Loan and Trust Co., which would become closely associated with City Bank as the century progressed. 

When it was published in 1845, three years before Astor's death, the sixth edition of Wealth and Biography of the Wealthy Citizens of New York City estimated Astor's wealth at $25 million. 


Quaker mariners at the helm
The Quakers were a religious group with a history reaching back to the 17th century. 

They believed in direct communication with God without the need for clergy as intermediaries. Among their members was William Penn, founder of the Province of Pennsylvania. 

The Quakers became active in 19th-century America as social reformers.

 City Bank president Isaac Wright brought to the bank's board other prosperous Quaker merchants, including Benjamin Marshall and William Fox.

 Marshall, who served as a director for three years, was a wealthy Englishman and, like Wright, one of the co-founders of the Black Ball Line. 

His brother Joseph was involved with the New York Mills cotton business. Fox would later become president of New York Gas Light Co.; he remained on the City Bank board until 1861. 


New team puts bank on more solid footing
Incoming management helps City Bank achieve temporary stability; a wealthy customer brings in funds and a talented new director
After failing to diversify its client base and allowing excessive borrowing by some directors, City Bank suffered so great a fall in its share value by 1824 that a merchant by the name of Charles Lawton stepped in to restructure the bank. 

That year he acquired a controlling interest; by July 1825, he had convened a new board of directors to whom he sold his shares in the institution.

 The new team included some prosperous Quaker merchants who put the bank on a more solid footing. Among the board members elected by Lawton in 1825 was Isaac Wright, a leading importer of British textiles, and a Quaker. 

In 1827, Wright became president of City Bank and remained in that position for over five years. Meanwhile, the Industrial Revolution, which had built up steam in Britain in the previous century, was spreading across North America and much of continental Europe. Despite the new blood, City Bank was still struggling to take full advantage of the economic boom that included the arrival of the railroad in the 1830s. 

Although Philadelphia remained the country's main banking center, the New York metropolitan region was now competing with both Philadelphia and Boston as an industrial hub. To maintain lending to its directors, City Bank diversified its deposit base and so built up its correspondent relationships with other banks.

 Such funds were volatile, however, leaving the bank particularly vulnerable when the Bank of England raised interest rates sharply in 1836, draining foreign exchange from the United States and triggering a slump in British demand for American cotton.

 Cotton merchants were left with unsalable inventories, and their banks with bad loans. In the consequent Panic of 1837, City Bank teetered on the brink of failure.

 It did not fail, due to the suspension of gold and silver payments by the banks and, records suggest, financial support from John Jacob Astor.

 A German immigrant, Astor had become the United States' first multimillionaire, earning a vast fortune from trading in furs, and then making investments in Manhattan real estate.

 Astor's representative, soon appointed to the board, was Moses Taylor. Few appointments were more significant in the bank's history. Taylor was at the helm for several decades. 

Gorham Worth, a career banker, scholar, and poet, becomes a "pillar" of City Bank, raising it to new prominence
Gorham Worth was the first president of the bank to have a purely banking background. Born in Hudson City, New Jersey, in 1783, Worth joined the Bank of Hudson as a clerk, before becoming cashier at Mechanics and Farmers Bank of Albany in upstate New York. Dreaming of an early retirement, he moved west but grew so bored with the "vacuum of mind" and "monotony and sameness of routine country life" that he took a job as cashier for the local branch of the Second Bank of the United States in Cincinnati, then little more than a village. After the death of his wife's sister, Worth resigned and moved to New York, where he got a job as cashier at the Tradesman's Bank in 1823. He joined City Bank as cashier in 1825, assuming the presidency two decades later, in 1843. Worth was "very much respected and was for many years the main pillar of the City Bank," according to a chronicler of the period who credited him with raising the bank to the top echelon of New York banks. "He was an extraordinary man," the chronicler recalled. "I well recollect entering the bank at various times, and seeing him sitting at his desk, with his back towards the door, writing, and yet he would call me by name as if knowing me by instinct or by sound of step ... Worth was not only one of the best informed and most able financiers in the country but he was a ripe English scholar, a wit and a poet." 

The New York Evening Post agreed. In an obituary following Worth's death in 1856, the newspaper wrote, "He frequently employed his leisure hours in literary composition, and his productions in prose and verse, though not often allowed to appear in print, were handed round among his friends and read with pleasure." 


Deep ties with Cuban clients
In the 1830s, Cuba was America's biggest export market after Britain and France. Moses Taylor maintained his ties with Cuban clients throughout his career. He acted as an investment advisor for Cubans and sent samples of bylaws, reports, rules, and regulations to help them set up companies or commercial associations. He also served as middleman for Cuban orders for railroads, ferries, lighthouses, ships, steam engines, and machinery for sugar mills. On one occasion, he even promised to send some whale parts for a museum being planned in Havana. Taylor often took responsibility for the education and well-being of Cuban planters' children while they were in the United States. By 1872, planters had invested almost $3 million in the United States through Taylor's trading firm. In addition to Treasury notes, bonds, and real-estate mortgages, Cuban investments included securities issued by railroads, banks, and gas companies, sectors in which Taylor had also invested.

Taylor and Pyne light up Manhattan
Leading figures in City Bank help lay the foundations of a great utility company; Percy Pyne becomes bank president
Many companies in the industrial and financial empire of Moses Taylor and his associates effectively became clients of the bank. One of the first was Manhattan Gas Light Co., founded in 1833. Eight years later, Taylor joined the company as a director and became active in its management. By 1848, it was America's largest gas company. Taylor eventually became the main shareholder and started acquiring shares in the rival New York Gas Light Co., probably at the invitation of William Fox, a fellow City Bank director who later became president of New York Gas Light Co. When newcomer Metropolitan Gas Light Co. later appeared on the scene, Manhattan Gas Light countered the competitive threat by acquiring an interest in its rival as part of a market-sharing deal. Taylor himself invested in Metropolitan Gas Light and became a director of New York Gas Light, thus bringing the entire New York gas-lighting business at one stage under his influence. When Moses Taylor died in 1882, he was succeeded as City Bank president by his son-in-law Percy Pyne, a British immigrant whose father had been a seal-skin broker on Wall Street. Pyne spoke Spanish and had been Taylor's right-hand man since becoming a partner in his trading company in 1849. Pyne married Taylor's daughter Albertina five years later. A director of City Bank since 1869, Pyne managed not only the bank but also Taylor's entire business empire. His first priority as president was to consolidate the gas sector in New York. It was becoming increasingly competitive with new entrants and technologies. These now posed a threat to the Taylor family gas investments, and Manhattan Gas Light in particular. In 1879, the work of the inventor Thomas Edison showed that the new incandescent electric light bulb was likely to replace gas lighting in the long term. The gas companies responded by refocusing on gas sales for cooking and heating. In 1882, a company called Equitable Gas Co. disrupted the market with a more efficient gas manufacturing process, backed by William Rockefeller and John Archibald of the Standard Oil group. Pyne responded in 1884 by unifying the gas light companies in which he had an interest into a single entity, Consolidated Gas Co. of New York. 

Security precautions
The life of a banker on Wall Street in the mid-19th century was utterly different from that even half a century later. One observer described the methods of Moses Taylor, president of City Bank: "His bookkeeper and assistants are merely his clerks. The original books are kept at his house, and are written up by his own hand every day. Those at the office are only copies. He does not ask his clerk, cashier or salesman to state his business. His books are in his own hands. Should his downtown books be burned it would not interfere with his business, for he writes his own letters, as well as makes his own entries." 

Commodity specialist joins board
A successful New York trader with a focus on Latin America, Moses Taylor helps broaden City Bank's client base and becomes bank president
Moses Taylor joined City Bank's board during the Panic of 1837, which was triggered by an effective hike in British interest rates. Although detailed records are lacking, it is likely that he came to the bank as the representative of German-born millionaire John Jacob Astor, who employed Taylor's father as his business manager and appears to have been a customer of the bank in the early 1830s. Although the evidence is not definitive, it suggests that Astor initially supported City Bank financially and then extended further aid to the younger Taylor in his new position as a director. "[Taylor's] connection with the Astors has brought gold to his coffers," according to one account published in 1845. Another account published in the 19th century stated that Astor "always backed up Moses when he needed aid." 

When he joined the board at the age of 31, Taylor was already a prominent New York merchant. After working as an apprentice with leading Latin American shipping merchants G.G. and S.S. Howland, he had set up his own firm to import sugar from Cuba 

in 1832. The Great Fire of New York destroyed its warehouse in 1835, but the firm quickly recovered and was very successful. It soon expanded into trading other commodities, such as pineapples, limes, and tobacco, and invested in ships to carry cargo between Havana and other Latin American ports. After becoming a director of City Bank, Taylor was invited to invest in companies run by fellow members of the board . The board was then headed by Thomas Bloodgood, a wine merchant of Dutch origin and also New York agent for the family plant nursery on Long Island. Taylor then invested in companies at his own initiative, asking associates in these ventures to join the bank's board. Taylor spent 20 years as a City Bank director before succeeding Gorham Worth as president in 1856; he remained in that post until his death in 1882. He extended his business empire, using the bank as a treasury for his own enterprises. 

City Bank, provider of liquidity
City Bank, the eighth-oldest bank in New York, and thus designated no. 8 in the clearing house, was well placed to shield clients during panics. Under Moses Taylor the bank became a vehicle for monitoring and controlling the companies that made up his industrial empire. For deposits, all companies had to keep their principal account with City Bank. In exchange, the bank would extend short-term credits to them as needed. By taking deposits from those with temporary cash surpluses and lending to those with temporary deficits, Taylor was fulfilling the treasury functions of the bank he controlled. It was a provider of liquidity at all times to himself and his companies, the bank's clients. The bank adopted a policy of "ready money," stressing liquidity and investing in call loans as a secondary reserve. It avoided volatile sources of funds. Taylor ran the bank so conservatively, by keeping large amounts of surplus cash, that City Bank was consistently able to fund its clients even during the financial panics that afflicted Wall Street. Clients were shielded from insolvency, and the bank itself was protected from possible failure. It was this conservative policy that made City Bank of New York one of the strongest of the city's banks in the second half of the 19th century. The bank's deposits rose in each of the financial panics during this period, while the average deposits of New York's other banks fell.

Bank shields clients from panics
Sixty banks cooperate in setting up the New York Clearing House, underpinning the strength of the financial system
Former U.S. Treasury Secretary Albert Gallatin called for a clearing house for New York banks as early as 1841. According to him, the absence of an arrangement similar to that adopted by British banks and the Bank of England "produces relaxation, favors improper expansions, and is attended with serious inconveniences." After considerable disagreement, the banks finally set up the New York Clearing House in 1853. Under arrangements based on the London Clearing House, each of the 60 New York banks had a settling clerk and a specie clerk (who handled money in the form of coins or gold) to clear transactions at set hours each day. The settling clerk from City Bank would receive gold from the specie clerks of the 59 other banks and the City Bank specie clerk would pay gold to the settling clerks of the other banks. Other banks set up clearing houses in Boston in 1856 and Philadelphia in 1858. To help stabilize the banking system during crises, the New York Clearing House developed a form of emergency currency based on loan certificates secured by sound assets that were temporarily illiquid. If that did not work, the banks would impose a small fee on those wishing to convert their deposits into cash during a crisis. The role of the New York Clearing House in countering potential instability was passed to the new Federal Reserve system in 1913. 

America's first trust company
In 1843, when Gorham Worth assumed the presidency of City Bank, Moses Taylor became a director of Farmers' Loan and Trust Company, founded in 1822 as the first trust company incorporated in the United States. He had been a shareholder since 1838. The relationship most likely arose from Taylor's connection to John Jacob Astor, who also owned shares in the company. After Astor died in 1848, records suggest that Taylor may have taken care of the Astor estate through the trust company. Taylor later acquired a controlling interest and eventually became chairman of the executive committee, allowing him to use the company to provide a wide range of financial services to his broader business interests. For bond issues by companies affiliated with Taylor, for example, Farmers' Loan and Trust not only invested in the securities but also acted as trustee and paying agent. The close relationship between bank and trust company lasted for many decades, culminating in a merger of the two companies in 1929. 

The Brownsville Story
In 1848, Charles Stillman and Samuel Belden laid out a town called Brownsville, at the U.S. border with Mexico. Two years later, Stillman, Captain Richard King, and two other partners formed a company that consolidated all commercial transportation on the Rio Grande. In 1853, Stillman purchased a huge estate, the Rincón de Los Laureles. Later, after it had changed hands several times, King bought it, and in 1907 the property became the King Ranch, a long-time client of the bank. 

City Bank backs transportation
With the bank's aid, Moses Taylor invests in railroads, coal-mining, and steamships, helping to drive a young nation's economic expansion
Before the invention of the automobile, rail transport played a central role in opening up economic opportunities throughout the United States. It was an important unifying force at a time when the nation's territory was expanding. In seizing the business opportunities that were presented, Moses Taylor and City Bank made their own contribution to infrastructure development. In the early 1850s, Taylor started to invest in the railroads that brought coal to New York. He also bought into the fields where it was mined. In 1854, he became a director of Delaware Lackawanna and Western Railroad, also known as Lackawanna Railroad, a year after it was formed through a merger of two other companies. Taylor eventually acquired control of the company, which operated a line through the Lackawanna Valley coal-mining area in Pennsylvania and had its own coalfields. Under Taylor, the rail network and coal-mining capacity was expanded, and Hoboken Terminal, across the Hudson River in New Jersey, became a key transport hub for the company. These lines are now owned by the Pennsylvania Northeast Regional Rail Authority, with both freight and tourist trolley services operated by Delaware Lackawanna Railroad, a subsidiary of the New York-based Genesee Valley Transportation Co. The territory occupied by the United States expanded considerably during the course of the 19th century, and Taylor's investments were timely. It was through his initial investment in the transportation of coal by train from Pennsylvania to New York, and his subsequent move into the iron and steel industry, that he was able to acquire interests in the rapidly expanding railroad operators of America's Midwest and South. 

Iron and steel
In 1853, when he was still only a director of City Bank and three years away from becoming its president, Moses Taylor acquired a majority interest in Lackawanna Iron and Coal Co. Founded by future Pennsylvania congressman George Scranton and his brother Seldon in 1840, the company had become an important producer of the iron used for rail tracks. Taylor later became a director of the company and negotiated the acquisition of Mount Hope Iron Co. in New Jersey, securing for Lackawanna stable supplies of iron ore that would help the company meet huge increases in orders during the Civil War. Taylor, who eventually became vice president of the company, is also credited with initiating its conversion to the Bessemer steel-making process that drastically reduced the costs of production. The Mount Hope Iron Co. remained an industry leader for several decades, until it was acquired by Bethlehem Steel Corp. in the early 20th century. It was through his connections with Lackawanna Iron and Coal that Taylor expanded his investments in the railroads beyond the East Coast. When it sold iron to railway operators in the Midwest and South, Lackawanna often accepted company shares as payment instead of cash. It sold some of these to its own shareholders, primarily Taylor. As a result, the City Bank president began to build up holdings in Georgia Central Railroad, and International Great Northern Railroad of Texas. He also acquired interests in Michigan Central Railroad, Chicago and Northwestern Transportation Co., and Chicago, Burlington Northern and Quincy Railroad. 

Marcellus Hartley
As a brigadier general, Marcellus Hartley came to prominence serving as President Abraham Lincoln's agent in Europe, buying arms during the American Civil War. He was also associated with Moses Taylor, president of National City Bank from 1855 to 1882, through his part in financing the first transatlantic cable. Hartley was an arms manufacturer in his own right and acquired the Remington Arms Co. in 1888. He also served as a vice president of Westinghouse Electric Co. and as chief investment officer of the Equitable Life Assurance Co. 

City Bank finances Union cause
Moses Taylor, as president of City Bank, leads banks' support for Abraham Lincoln; the bank acquires a national charter and changes its name
The American Civil War (1861-1865) occurred after 11 southern states declared secession from the United States and formed the Confederate States of America ("the Confederacy") to fight for independence. The contentious issue was the expansion or restriction of slavery. In the first major battle of the war, the Confederates of the breakaway southern states defeated the Union forces of President Abraham Lincoln in the First Battle of Bull Run in eastern Virginia in 1861. Lincoln soon sought financial assistance from a group of bankers in New York, Philadelphia, and Boston. City Bank president Moses Taylor, spokesman for the group, announced that the banks would subscribe to a $50 million gold loan, with City Bank itself participating. As the war progressed, confusion arose over the thousands of different banknotes in circulation. Congress attempted to develop a uniform national currency by passing the National Bank Act in 1863, which was superseded by another law in 1864. City Bank gave up its state charter in 1865 and became a national bank. To meet federal requirements, it agreed to several conditions: a minimum capitalization of $200,000; no branching; securitization by federal bonds; and retention of 25 percent of its capital as reserves. It could not offer mortgages or exercise trust powers. The benefits, however, outweighed the constraints. National City Bank of New York (as it was renamed in 1865) became a depository for the federal government and began to accept the required reserves of national banks in other cities, giving it the wherewithal to become a bankers' bank. Adding "National" to the name also increased its prestige, indicating that it was able to meet the U.S. government's most stringent requirements. The new name appeared on banknotes of various denominations up to $1,000 that would remain in circulation until 1935. 

Transatlantic Cable
Moses Taylor was one of the original investors in the New York, Newfoundland, and London Telegraph Co., founded in 1854 by Cyrus West Field, a successful young businessman who is credited with laying the first transatlantic cable. Taylor was treasurer of the new company and a director. The first cable was completed in 1858 but soon broke down. After interruptions caused by the Civil War between 1861 and 1865, three more unsuccessful attempts were made. The company finally succeeded on the fourth attempt, in 1866, bringing New York into virtually instant communication with London. Field and his associates also founded American Telegraph Co. - this became the biggest telegraph operator in the East, with lines from Maine to Louisiana. Its only major rival was the Western Union Telegraph Co., which was growing its network westward to the Pacific, centered on the Mississippi Valley. Western Union later merged with American Telegraph, giving it a dominant role at the American end of the transatlantic cable. After the merger, Taylor became a Western Union director, a position he would hold for the rest of his life. 

A modern utility is born
At a meeting on November 10, 1884, gas company executives decided to consolidate their businesses. The meeting was held at the Manhattan Gas Light Co. headquarters at 4 Irving Place, the present-day location of Consolidated Edison's headquarters. As a result of the merger, the Taylor family retained almost half of what would become New York's leading utility. "Con Edison" remains one of the most familiar names in the lives of New Yorkers to this day.

Union Investment Co.
James Stillman was both the manager and a shareholder of an investment vehicle named Union Investment Co. Among the other shareholders were former U.S. President Grover Cleveland and former Treasury Secretary Charles Fairchild. After leaving the Treasury Department in 1889, Fairchild had become president of New York Security and Trust Co. He teamed up with Stillman in a range of business ventures including an investment in Georgia Central Railroad, one of the Taylor family companies. Stillman sat on the board of the trust company, along with Daniel Lamont, who would serve as Secretary for War during Cleveland's second term as president. Fairchild, in turn, joined the National City Bank board in 1898 and remained a director until 1909.

Rise of cotton-broker James Stillman
Marking a new era, an influential businessman becomes the bank's new president, taking the bank into a period of rapid development
A native of Connecticut, Charles Stillman moved to Mexico in 1828 and built up a successful business empire spanning cotton, real estate, and silver mining. When Mexico was forced to cede Texas in 1848 after a two-year war with the United States, Stillman helped found the border settlement of Brownsville. Stillman also set up the first steamboat company on the Rio Grande. By placing ships on the Mexican registry, he was able to export cotton throughout the Civil War (1861-1865). Stillman was a long-time National City Bank client. In 1870, his business partner Benjamin Dunning became a director of the bank. When Dunning died in 1890, Charles Stillman's son James took the seat on the board. So began the National City Bank career of a man who was to have a profound influence on the bank's development. Shortly before his death in 1882, National City Bank's Moses Taylor invited James Stillman to take part in several ventures, notably the reorganization of Houston and Texas Central Railroad, of which Taylor was a director, along with New York lawyers William Phelps (a National City Bank director from 1869 to 1894), and William Dodge of Phelps, Dodge and Co. (whose son Cleveland served on the bank's board from 1889 to 1926). Taylor's immediate successor as National City Bank president, his son-in-law Percy Pyne, also cultivated James Stillman. As his health deteriorated, Pyne asked Stillman to help manage two institutions key to the Taylor family business. In 1889, Stillman duly became a director of Farmers' Loan and Trust Co. Then, when Pyne resigned as National City Bank president after a stroke in 1891, the bank's board elected Stillman his successor. Pyne remained on the board as a director until his death in 1895, allowing for a smooth transition at the helm of a bank which, for half a century, had been largely dominated by a single family. The choice of Stillman was prescient. On his watch, the bank grew so rapidly that it moved into a headquarters building the size of a city block, was the first bank in the United States to have $1 billion in assets, and started a foreign department that set the stage for its overseas ventures. 

National City Bank forges investment bank alliance
A railroad refinancing opens up new strategic opportunities
In 1882, when Moses Taylor died, the customer base of National City Bank consisted largely of companies such as sugar merchants, cotton brokers, coal mines, gas utilities, and southern railroad companies. In the general character of its business, the bank was not very different from its major competitors. It also looked after the fortunes of railroad baron Cornelius Vanderbilt and, especially, Taylor himself. Yet, it was still relatively small. When James Stillman became president after Percy Pyne's resignation in 1891, it had only three officers (the president himself and two cashiers) and a handful of staff. Under Stillman the bank continued to function as a treasury for companies in the Taylor empire, and he began using the bank to support his own business activities through Union Investment Co. After Union Pacific Railway went into receivership in 1893, National City Bank seized a chance to break into the big league of investment banking. When an attempt to recapitalize Union Pacific was abandoned amid political uncertainties, the task then fell to Jacob Schiff, of investment bank Kuhn, Loeb and Co. Schiff turned to Stillman to help out on the commercial banking side. To cover the costs of the Union Pacific workout, Stillman committed $200,000 of his own funds to an initial bond issue raising $10.5 million, while National City Bank itself subscribed to $250,000 in a subsequent issue for $3.5 million to meet coupon payments on Union Pacific bonds. Overall, Schiff and Stillman arranged nine bond issues, underwritten by Kuhn, Loeb and Co. to raise $105 million over the subsequent three years. Stillman's personal investment in these bond issues amounted to $5.8 million, which was even more than the $3.6 million committed by stockbroker and railroad investor Edward. H. Harriman and almost as much as the $6.5 million subscribed to by Kuhn, Loeb. National City Bank invested $1.8 million and acted as agent to transfer the funds to government.

A powerful alliance
The investment bank Kuhn, Loeb had close connections with European investors. It built up extensive underwriting businesses in the 1870s and 1880s, overtaking Boston rivals. They had an ally in First National Bank of the City of New York, which sold securities originated by others through its network of correspondent banks. First National Bank of New York was a blue-ribbon corporate bank that National City Bank would acquire many years later, in 1955. The Union Pacific mandate was a big opportunity for Kuhn, Loeb. It had specialized in railroad finance but not, hitherto, in the rehabilitation of failed railroad operators. The investment bank had no commercial banking operation. This is why Jacob Schiff, son-in-law of Solomon Loeb, one of the firm's co-founders, turned to James Stillman at National City Bank. Thus was forged an alliance between the two men, who both enjoyed exceptionally strong relationships with institutional and individual investors.

New forex department for clients with operations abroad
Foreign business requires a new kind of service; correspondent links forged overseas
By the end of the 1800s, some of the large corporate clients of National City Bank conducted much of their business outside the United States. Among them were Standard Oil (particularly strong in China) and American Sugar Refining. In response to their needs, in 1897 the bank opened a foreign exchange department, offering to buy and sell drafts, make cable transfers and collections, and issue travelers' letters of credit. This was a relatively new type of business in the United States. Against this background there was growing European investor interest in dollar-denominated stocks and bonds, especially in London but also in Berlin, Amsterdam, and Brussels. As to capital markets, National City Bank acknowledged that London was still the undisputed leader, notwithstanding the growing importance of the New York, Paris, and Berlin bourses. One of the first big transactions of the new foreign exchange department came in 1899, when the bank received a $5-million deposit from the United States Treasury. This amount was to be credited to Spain as part of a $20-million payment for the Philippines under the treaty ending the Spanish-American War. By 1912, National City Bank had correspondent banking relationships with 132 banks worldwide and deposits with them amounting to $6 million. The foreign exchange department drew many recruits from Europe. In 1907, there were individuals from Austria, Germany, the Netherlands, and Poland. Departmental manager John Gardin had noted that in Europe even messenger boys had to have completed high school or at least graduated from a commercial college before being employed by a bank. They had to be fluent in at least one foreign language and be prepared to work for no pay at all for the first three or four years. "The men come out of their apprenticeship with a thorough business education, well fitted to the battle of life," he wrote. According to Gardin, Americans considering a career in foreign exchange needed a broad world view. They had to be "acquainted with ethnological conditions the world over," he said, with "a knowledge of political events, throughout the universe, besides a certain skill in mathematics, reaching far beyond the multiplication table." 

New opening in Panama
In 1903, Panama broke away from Colombia and became an independent state under U.S. protection. As part of this arrangement the United States took over the work on the Panama Canal, which had begun in the 1880s. On August 17, 1904, at the U.S. government's request, IBC opened a branch in Panama City, followed two years later by one in Colón, on the Atlantic side of the young country. IBC provided financing for Panamanian development and banking services for firms working on canal-related business. By 1916, the Panama Canal was in uninterrupted operation and international shipping provided a new client base for financial institutions. 

Currency in Shanghai
The Chinese currency system was complex. Each city had its own currency, so there was "foreign exchange" between cities. To add further complication, some foreign banks had the privilege of issuing banknotes. IBC was one of them. When National City Bank later absorbed the IBC branches, it became responsible for the payment of outstanding notes. This five-dollar banknote was issued by IBC in Shanghai, iin 1905. Shanghai was IBC's first branch in China, opened in 1902, the same year as its branches in Singapore, Hong Kong, Yokohama, and Manila. Bombay opened shortly afterwards. 

Union Pacific gains national potential
By 1906, Union Pacific Railway had acquired shares in five railroads that now lay at the core of the National City Bank's activities. If these had been consolidated with its own lines to the West Coast, Union Pacific would have had a national network. The five railroads were the Illinois Central Railroad, the Chicago and Northwestern Railway, the Chicago, Milwaukee and Saint Paul Railroad, the Baltimore and Ohio Railroad, and the Pennsylvania Railroad. James Stillman took part in underwriting their bond issues and in several cases served as a director. The practice of acquiring other railroad companies allowed Union Pacific to become the largest rail network in the United States. 

Impressive statistics
The banking hall at 55 Wall Street was 188 feet long and 124 feet wide. The ceiling was 72 feet high at the dome's center. The solid bronze main doors weighed 3,300 pounds. The vault was nearly 25 feet high and contained 400 tons of steel. The doors themselves weighed 16 tons. The vault was protected by a device that would project jets of scalding steam from holes in a pipe towards anyone trying to break in. Initially there were 72 telephones in the building (a huge number for the time), a vacuum-tube system for sending messages, an electric system that could physically deliver checks over a distance of 190 feet in less than a minute, a "telautograph" which transmitted handwritten facsimiles, and a Dictograph, a telephone specially designed for dictation. 

The night shift
Business with correspondent banks was conducted by registered mail. To process it, National City Bank established a night shift. In the early 1900s, the night clerks handled 10,000-30,000 checks every shift, worth $4-10 million. Messengers would collect regular mail at the New York Post Office at midnight, 3:00 a.m., and 6:30 a.m., while express packages were received at 4:00 a.m. At that time of the morning in summer, Commercial Cable Co. messengers were often seen playing ball on the street near the New York Stock Exchange. The night clerks ate at a restaurant on Cortlandt Street, a favorite of telephone company clerks, or at another on Park Row favored by reporters reading newspapers coming off the presses. During winter months, the night clerks often held races as they headed off to eat, with policemen on duty sometimes acting as starters. On Sunday mornings only a few places were open, serving stale pastries and coffee, but spiritual needs were met by a downtown church holding a special service for night workers at 2:30 a.m. The Night Force division grew in strength 

55 Wall Street, symbol of solidity
National City Bank renovates a Wall Street icon for its new head office, where classical style cloaks new technology and banking innovation
For much of the 20th century, National City Bank's fundamental strengths were expressed in the architecture of its head office, 55 Wall Street. The original Merchants' Exchange, home to the Stock Exchange, stood here but was destroyed in the Wall Street fire of December 1835. In its place rose a new building, designed by Isaiah Rogers. For the main facade, stone columns weighing 45 tons and more than 38 feet long were floated on rafts from quarries in Quincy, Massachusetts, and hauled to the site from the wharf by 20 oxen. Each shaft was formed from one block of stone. In 1863, the federal government took over the building and it became the New York Custom House. In 1899, it was bought by National City Bank for $3,265,000. One of Stillman's colleagues commented, "The idea of occupying an entire city block with a bank was something that made everyone raise his hands in consternation." In 1907, the bank commissioned the leading architects of the day, McKim, Mead and White, to adapt the building. The old structure was so robust that dynamite was needed - the old plaster was stronger than the granite and brick. To make a hole in the ground floor for easy access to the basement, the contractors tried dropping a 15-ton block of granite from about 50 feet. It bounced. Workers found a cannonball embedded in a wall, a keg of gunpowder and more than 100 old-fashioned bombs, probably intended to protect the Custom House during the Draft Riots of 1863. Soon, above the original structure rose a four-story addition, faced with columns in the Corinthian style. At the heart of the new building was a modern steel frame. The old dome was carefully reconstructed in a style reminiscent of the Pantheon in Rome. The project was carried out with astonishing speed. Demolition began on December 3, 1907; the first new steel was laid on May 25, 1908; the building was completed on December 15, 1908. On December 19, some 400 employees helped carry books, papers, typewriters, adding machines, and other office materials across from 52 Wall Street between two lines of police. Over $70 million in cash and $500 million in securities were transferred by hand to the two-story steel vault, and the new building was opened to the public on December 21, 1908. 

An early pioneer in foreign exchange
John Gardin, who ran National City Bank's foreign exchange business starting in 1904, had an unusual background. Born in South Carolina in 1853, he studied in Germany as a boy and worked for Württembergischer Bankanstalt in Stuttgart as a young man. After returning to America, he joined First National Bank of Chicago, later becoming manager of its foreign exchange department. During Gardin's five-year tenure, the foreign exchange department quadrupled in size. In 1909, he was named to the position of National City's vice president, newly created after Frank Vanderlip succeeded James Stillman as president, and Stillman took the new job of chairman. At that time, the bank had four vice presidents. Seven years later, in 1916, Gardin became chairman of a newly acquired affiliate, the International Banking Corporation, which played an important part in the development of National City Bank's international network. 

Corporate clients push abroad
Among the companies that pressed National City Bank to open overseas branches was United States Steel Corp. Its lead bank, the blue-ribbon First National Bank of the City of New York, had no interest in international banking - its chairman believed U.S. banks did not have the necessary experience. So U. S. Steel turned to National City Bank, which had built up expertise in foreign-exchange trading over the previous decade. The steel giant promised to make a substantial deposit and E.I. du Pont de Nemours and Co. offered Vanderlip similar encouragement. Several National City Bank directors were linked with companies that would benefit from foreign branches and were major customers of the bank. W.R. Grace and Co. had extensive shipping, textile, sugar, and other interests on the west coast of South America, for example. International Harvester had sales outlets and agencies on that continent. Armour and Co. had acquired a meatpacking plant in Argentina that exported beef to Europe. Standard Oil had refining and distribution facilities across the world. It was the requirements of clients such as these that led the bank to expand operations abroad. 

Rise of Vanderlip, self-made man
Stillman steps back; a visionary new president sees potential in services for clients operating on other continents
At the end of 1908, after National City Bank had moved into its palatial new home at 55 Wall Street, James Stillman, the bank's president, decided to move out of the limelight and adopt a mainly advisory role, based at his home in France. "The completion of the new building is a fitting time for this step," he wrote. "We have erected a superb monument and laid the foundation for limitless possibilities." In January 1909, Stillman resigned as president and assumed the new position of chairman. His successor as president was Frank Vanderlip, who had worked for the bank since 1901, overseeing he establishment of the bond department. Vanderlip was particularly struck by the regional commercial potential offered by the Philippines, the Spanish colony acquired by the United States as part of the treaty ending the Spanish-American war in 1899. While there were already strong ties between the United States and Japan, Vanderlip wrote after the war, the Philippines could be an important gateway to other Asian markets including the Russian Far East. Frank Vanderlip was born in Illinois. He served an apprenticeship in a machine shop at 75 cents a day before landing a job as a stenographer at a Chicago investment house at $10 a week. He then took a one-year course at the University of Illinois and worked as a newspaper reporter, attending supplementary lectures at the University of Chicago. Vanderlip later became financial editor of the Chicago Tribune and, in 1894, bought a part interest in the Chicago Economist, where he served as associate editor for three years. When Lyman Gage, president of First National Bank of Chicago, was appointed secretary of the United States Treasury in 1897, he took Vanderlip with him to Washington as his private secretary. Within three months, Vanderlip was promoted to the position of assistant treasury secretary and was soon involved in the arrangement of a $200-million loan to finance the Spanish-American War. James Stillman was an acquaintance of Gage, and it was this connection that led to his hiring Vanderlip in 1901. 

Rivals to the south
In 1910, Number Eight, the staff magazine, profiled Argentina's capital. "Do many Americans realize that Buenos Ayres [sic] is the largest city in the world south of the Equator? That the city has nearly one and one-half million inhabitants? That it has more and better paved streets, in proportion to its size, than any other city in the Western Hemisphere? That its trolley service carried last year nearly 8 million people, and is now so crowded that plans for an underground railway are prepared? That its opera house can put to shame anything else in America ... England, France, Germany and Italy have a just appreciation of this city's importance, and are competing keenly for trade which we in the United States think is hardly worth a serious struggle."

Bonds go to the masses
The National City Company, an affiliate of the bank, breaks the stereotype and adopts modern methods in the sale of bonds
In 1911, National City Bank set up an investment affiliate. It was modeled on the First Security Co. founded in 1908 by First National Bank, a blue- ribbon corporate bank which National City Bank acquired almost half a century later. The National City Company initially served as a holding company for stakes in other banks in New York, Philadelphia, Boston, Washington, Indianapolis, and Kansas City, as well as Cuba, where it had an interest in Banco de Habana. In 1916, the affiliate acquired Wall Street securities firm N.W. Halsey and Co. with branches in four cities on the U.S. East Coast and two in Europe. Over the next three years, the National City Company expanded significantly. By 1919, it employed more than 1,650 people in 31 cities. It had more than 10,000 miles of telegraph cables, including the first transcontinental wire to be used exclusively by an investment bank. In due course, the affiliate acquired the bank's own bond department, creating the foundation of a global securities firm. The investment bank developed strong sales and marketing teams, which adopted modern advertising techniques. Until then "it was considered almost unethical for bond dealers to seek business in ways approved by general merchandisers," the president of National City Company, Charles Mitchell, told trainees in 1919. Partly buoyed by the government drive to sell war bonds to the public in 1917, the National City Company began merchandising corporate bonds like any other daily household item. As Mitchell said, "we took from the experience of successful manufacturers and distributors those pages which had spelled success for them — lessons they had learned in advertising and publicity, and in industrial education." Mitchell praised the government for educating the public about investment during its campaigns to sell war bonds. "Government financing," he said, has provided a "liberal education for most people and materially benefited us." That education was partly thanks to National City Bank president Frank Vanderlip. Based on his experience in marketing Spanish-American war bonds for the Treasury, Vanderlip accepted a request by the New York Federal Reserve Bank that he should organize publicity for the first war-bond campaign in mid-1917. 

Advertising comes to finance
Following the trail opened up by its securities affiliate, National City Bank gets its message out to the world, stressing sound fundamentals
The establishment of National City Company as an affiliated securities firm in 1911 gave rise to advertising activities soon transferred to the bank itself. By 1919, National City Bank had a fully fledged publicity department. Advertising grew as the bank ventured into retail banking from 1921. Institutional advertising pre-dated direct advertising by many years. In 1904, the bank began to put out a monthly bulletin, United States Securities and Government Finance, written by vice president Frank Vanderlip, formerly assistant treasury secretary in Washington. Vanderlip had once been a financial journalist and had a natural flair for publicity. The initial audience for the bulletin were other national banks who bought government bonds. National City Bank later began to distribute it to foreign banks and translate it into Spanish and French. Other specialist publications included addresses by officers of the bank or studies on particular topics. "The press of the country has made liberal use of the publications of the Bank and these have had not a little weight in constructively molding public opinion," advertising chief Wells Sawyer said in 1919. After the bank began setting up foreign branches in 1914, a new monthly publication known as The Americas was launched. Although devoted primarily to trade and industry in Latin America and the Caribbean, it also covered Europe and Asia. Many articles were written by branch staff or representatives abroad. By the end of the decade, 50,000 copies of the new monthly were being distributed to correspondent banks. It was also sent to schools and colleges, including the University of London, which took 100 a month. As well as advertising its financial results in newspapers, the bank began to increase the amount of information in its regular financial statements. In 1923, staff produced 80,000 copies of an eight-page booklet containing the financial statement for March 31 plus lists of directors, executives, overseas branches, as well as a letter from president Charles Mitchell. The booklet reached destinations around New York on the morning of April 1, the same day as the financial statement appeared in the newspapers. 

Getting Closer to the South American market
Despite the country's large trade surpluses, U.S. manufacturers were sometimes slow to read their South American markets correctly, and buyers of U.S. merchandise often complained of poor packaging. National City Bank vice president John Gardin advised them to listen more closely to the customers. "You have to meet their wishes and not try to foist goods upon them which they do not want. They like pointed shoes. The American manufacturer sends them round-toed shoes, and the result is that the man who tries to sell them comes back and says there is no market for American shoes down there. The South American rarely, if ever, pays cash and the American says we cannot give credit so far away from our country." Salesmen should be a kind of advertisement, Gardin believed. "Why would it not be a proper thing for them to advertise by means of intelligent salesmen who would study the characteristics of the people, note what is wanted, speak their language and make themselves familiar with the customs and the habits of the people? Such a policy would, within a few years, pay for itself."

Former Persia Official
In 1912, National City Bank appointed Morgan Shuster as South American representative of its affiliated investment company, National City Company. Shuster had recently returned from Persia, where he had served as the country's treasurer-general under the appointment of a newly formed parliament. He had previously worked in the Philippines with Governor General (now president) William Taft. It was Taft who had recommended Shuster to the Persian government as someone who could reorganize the country's finances. Despite objections by the Persian parliament, Shuster was expelled under pressure from Russian and British colonial authorities.

Accuracy and speed drills
The first compulsory class in Basic Arithmetic amounted to drilling 47 young employees in simple operations of addition, subtraction, multiplication, and division. While the need for accuracy was impressed upon the class, teacher Howard Schumacher of the auditing department also tried to develop speed. As the bank said at the time, "some of the boys developed quickness and accuracy which were nothing short of marvelous." A messenger by the name of Strafford Wentworth won $10 for being the only student to get all the answers right in the final examination in 1916. Another messenger named Harry Popper won $5 for coming in second and getting four of the eight best times. To convert £45,674 into dollars at an exchange rate of $4.76 without the aid of an adding machine, he arrived at the correct answer ($217,408.24) in 26 

seconds. Even more impressively, the 16-year-old was able to discount a note of $75,000 due in 74 days at 4 percent to get the right answer of $74,383.58* in 1 minute and 57 seconds. *The four-step operation assumed annual interest is paid on 360 days and involved two simple multiplications followed by long division to two decimal places and a simple subtraction. 

The financial library
Knowledge was crucial to all areas of the bank's activities. As the securities- underwriting business expanded, the bank established a financial library to meet the growing demand for information about issuers. The collection was built up over some 11 years by librarian Florence Spencer. By 1912, it had expanded to three rooms and had information on 100,000 companies, as well as 5,000 books and pamphlets. Daily stock exchange quotations were available from about 30 exchanges across the United States and 12 exchanges in Europe. Weekly quotations were available for Buenos Aires. By 1919, the collection amounted to 30,000 books and pamphlets. In 1917, Spencer was appointed to the post of chief clerk in charge of female staff.

Client relationship lasts over a century
When the International Banking Corporation, later acquired by National City Bank, opened a branch in the southern Chinese city of Canton (present-day Guangzhou) in 1906, its first client was a trading firm called Li & Fung. At a time when China's foreign trade was largely monopolized by British firms, Li & Fung stood out as the first export firm wholly owned by Chinese. It was founded in 1906 by Fung Pak-liu, a Hong Kong-educated schoolteacher who had recently returned to Guangzhou, and Li To-ming, a Chinese merchant whose family owned a porcelain shop. Business with the United States flourished as Li & Fung's product range expanded from porcelain to include bamboo, rattan, fireworks, jade, and ivory. The company relocated to Hong Kong in 1937 and became the British colony's top garment exporter. In 1973, it went public. Its new issue was oversubscribed 113 times, a record held by the company for 14 years. One of the sons of Fung Pak-liu was Fung Hon-chu, who took over as manager in 1937. At a celebration marking the firm's 75th anniversary, he spoke very positively of the firm's relationship with Citibank. The bank, he said, had supported the company in various ways over the years, with services including trade finance, deposits, foreign exchange, and letters of credit. Citibank "covers all the major cities of the world. … With its support, we have been able to meet our customers' needs and ensure our own financial liquidity." As Li & Fung managing director, Fung Hon-chu appointed retired Citibanker Ho Chik-kong as a manager in 1969. The former senior officer at First National City Bank's Guangzhou branch had known Fung's father, one of the firm's two co-founders. In 1976, Ho was named as a director of a finance and investment subsidiary of Li & Fung, and later he became group managing director. By 2011, Li & Fung was a multinational group employing close to 37,000 people in 40 economies. Management had passed to the third generation of the Fung family, the Harvard-educated brothers Victor and William Fung. The company remains one of Citi's most longstanding clients outside the United States. As Li & Fung and Citi commemorated a century of partnership, Citi's Hong Kong country officer and Asia Pacific chairman Shengman Zhang said that the two companies enjoyed a "special relationship" that was strong and flexible enough to reach across time and generations. "Such strong ties can only exist where there is trust," Zhang said.

Head office is knowledge hub
Bank presidents Stillman and Vanderlip drive staff education, extending it beyond core banking skills
Improving staff educational levels was a priority for National City Bank. In this respect it was among the most progressive banks of the time. Courses were organized through the City Bank Club, set up with a $10,000 grant from president James Stillman in 1904. Initial lectures, papers, and competitions led to more formal courses on technical banking and bond arithmetic. In 1910, about 30 department heads and prominent clerks started gathering on Tuesday evenings to share information about the activities of the various departments. It was around this time that about 50 employees began a two-year course at the new Alexander Hamilton Institute of the New York University School of Commerce. With growing interest in business opportunities in Latin America, the bank then secured a Spanish-language professor to hold classes twice a week. To mark the bank's centenary in 1912, Stillman offered a grant of $100,000, which allowed a broader curriculum to be developed, which was offered free of charge to all members of the City Bank Club. Instructors were hired to teach subjects including business English, mathematics, economics, Spanish, German, penmanship, stenography, and foreign exchange. In addition, a Yale Law School professor started delivering weekly lectures in commercial law. A key development came in 1914 with the inauguration of practical banking classes covering all aspects of the bank's work and the principles of banking, law, and economics. Fifty-six men took part in the three-month course on Tuesday evenings and Friday mornings. Attendance was compulsory. Graduates attended a more advanced course on subjects such as notes and bills of exchange, foreign exchange, loans, credits, and letters of credit. In 1915, president Frank Vanderlip ordered that from then on, all male employees under 21 would have to spend at least two hours a week studying office practice plus a second subject. The second subject could be chosen from English, arithmetic, stenography, commercial geography, Portuguese, Spanish, and French. In a letter to all staff on August 24, 1915, Vanderlip strongly urged males over 21 and all females "to take up as much educational work as they possibly can with convenience and justice to themselves and their employment." Three types of practical banking classes were now offered, along with a new class in political economy. Of the 16 teachers engaged by the bank in 1916, 12 were full-time employees. The number of staff enrolled in various courses was around 600, with about a third studying two subjects and others as many as six or seven. The most popular courses were banking, English, arithmetic, Spanish, and commercial geography. 

Bank's network mirrors American trade
The five countries chosen for the initial Latin American branches reflected both sources of key U.S. imports, and export markets with potential. Until now, natural resources from South America had been shipped to the United States in vessels that were then reloaded with U.S. merchandise bound for Europe. These vessels, in turn, would be reloaded with European-manufactured goods for South America. U.S. imports from South America cost about 50 percent more than its exports to the region, which were usually shipped and chiefly financed by European companies or by companies in South America financed by European capital. "These conditions ought to be reversed," wrote foreign trade department statistician O.P. Austin in late 1914. "Now it is hoped and expected that this trade relation will become direct ... financed by American capital and American experience and stated in terms of United States currency."

Food rationining
Eight months after the United States declared war on Germany, staff in New York learned about the hardships being endured by their colleagues in London. Writing in the December 1917 issue of The Americas, a European representative of the bank informed readers that "voluntary" food rationing for adults was now in force. For example, men engaged in heavy industrial or agricultural work could expect eight pounds of bread a week, while sedentary women could expect only two. The weekly ration for meat was only two pounds. Children were supposed to receive "reasonable" rations, although the actual amounts were not specified. 

"Foreign branches - why not?"
New regulations allow national banks to go international; the bank responds to customer demand, starting with Argentina
Within two months of Frank Vanderlip's appointment as president of National City Bank in 1909, an article in the bank's staff newsletter appeared with the heading: "Foreign Branches — Why Not?" It noted that the British empire had enabled London to become the world's leading financial center. "It would appear that the day is not far off when London will be ousted from its position by New York," it said. However, America faced constraints. It still did not have a central bank, and the national banking system created in the mid-19th century "is not proving adequate to present needs." Four years later, at the end of 1913, came the passage of the Federal Reserve Act, allowing national banks to set up branches abroad if they had at least $1 million in capital. Vanderlip had already sent an assistant to Latin America to assess the business climate there, convinced that growing trade with a region so rich in resources would be profitable. James Stillman, National City Bank's chairman and largest shareholder, was more cautious. The balance was tipped by corporate customers who wanted banking services abroad, in Latin America especially. National City Bank duly applied to the new Federal Reserve Board and the authorities in Argentina. The Buenos Aires branch opened on November 14, 1914, two months after the outbreak of the Great War in Europe. It was the first overseas branch of any nationally chartered bank in America - not to be confused with overseas branches opened from 1902 by the state-chartered International Banking Corporation.

Business blooms in Latin America
National City Bank's first big push overseas reflects the growth in international trade as war breaks out in continental Europe
As World War I was breaking out in Europe, Argentina was enjoying a trade boom. National City Bank's first foreign outpost, the Buenos Aires branch, opened in late 1914, was almost immediately profitable thanks in part to a large foreign-exchange business. National City Bank established ties with Banco de la Nación Argentina, the largest bank in Argentina, and opened accounts with both U.S. corporate clients and local companies. A second foreign branch was established in Rio de Janeiro, Brazil, in April 1915, with a sub-branch in Santos, the coffee-trading center. A second Brazilian branch came a few months later, in São Paulo. It was followed by a branch in Montevideo, Uruguay, and another in Havana, Cuba, which acquired Banco de Habana, partly owned by National City Bank chairman James Stillman. In 1916, branches were opened in the Brazilian city of Salvador (Bahia), the country's sugar-trading center, and the Cuban city of Santiago. National City Bank then entered Chile, its fifth country in Latin America, with a branch in Valparaiso, the country's main port, linked by railroad to Buenos Aires in Argentina on the Atlantic coast. The sailing time from Valparaiso to New York by steamer had just been almost halved by the completion of the Panama Canal in 1914. National City Bank gradually expanded its regional footprint to include branches in Venezuela in 1917 (where the oil boom had attracted many international companies which required financial services), and Peru in 1920. Its affiliate from 1915, International Banking Corporation (IBC), meanwhile established its own branches in Colombia in 1916 and the Dominican Republic in 1917. In 1922, National City Bank also acquired a controlling interest in Banque Nationale de la République Haiti. 

The Impact of World War I
Military service for male staff opens up career opportunities for women; the bank's president promotes the sale of Liberty Bonds
World War I broke out in 1914. The United States, after initial efforts by the government to resist involvement, entered the fray in 1917 following a sea-change in U.S. public opinion. While banking operations in combatant countries were adversely affected, in the early years of the war National City Bank managers focused their attention on the commercial opportunities presented by the disruption of European trade and its likely impact on the bank's overseas competitors, notably those in Britain. In 1914, chairman James Stillman offered his Paris residence to the French government for use as a hospital. He also offered 500,000 francs ($200,000) to France's president Raymond Poincaré to support orphans of those admitted to the Légion d'Honneur, the nation's premier official decoration. After America declared war on Germany, many male employees signed up for military service. Consequently, the bank started hiring female clerks in large numbers. Over six weeks in 1917, former librarian Florence Spencer and another assistant chief clerk interviewed more than 1,000 candidates. About 10 percent were accepted, given a week's training, and placed in various departments. Notably, the foreign exchange department received 45 women and the check desk 40. F.C. Schwedtman, the vice president who oversaw the bank's educational activities at this time, urged women working at the bank to be assertive. "From time immemorial, it has been man's place to go out into the world to hunt and collect and women's place to stay at home and prepare and take care of the things which the man has brought in," he told the women's association of the bank in May 1918. "The same policy, however, carried out in business, will not work. To be specific, the business woman must not let the man do all the acquiring of information and knowledge. She must not passively accept information which someone else gives her," Schwedtman said. "When some point comes up in connection with your job that is not clear, ask about it, study it until it is clear." Overall, 518 bank staff entered military service, nearly a third of the total. Among them was Katherine Hay Robinson of the foreign department, who was attached to the Army Signal Corps in France as a telephone operator. She was stationed at the Paris residence of President Woodrow Wilson during the Paris Peace Conference in 1919. Eight employees lost their lives in the war, as did 11 of the 78 men from the International Banking Corporation who saw military service. 

The effect of altitude
National City Bank's enthusiasm for Latin America claimed an early victim. On November 21, 1915, vice president Herbert Eldridge died of heart failure caused by altitude sickness. He was in his mid-forties. He was on a visit to the Bolivian city of Potosi, which lies at an altitude of more than 13,000 feet, as part of a tour of the Andes region. Earlier, Eldridge had called on the new São Paulo branch in Brazil. He had been selected by Frank Vanderlip to supervise the foreign branches out of New York. After joining National City Bank in 1913, he had played an active role in helping to expand the bank's business in Texas - previously he was vice president of First National Bank of Houston and president of the Texas Bankers' Association. 

International talent
Finding Americans with foreign banking experience was difficult in the early days. Foreign talent had a crucial part to play. In São Paulo, for example, the manager of the branch set up in 1915 was Canadian and the assistant manager Irish. Of the 20 remaining executive and clerical staff, half were Brazilian, and the rest were European. There were just four Americans, including the credit department manager and the sub-accountant. It was a similar story in Havana. Although the manager in 1915 was American, the assistant manager and both the manager and deputy manager of foreign exchange were Cuban. Of the 40 other employees, half were Cuban. Most of the rest were from Europe, Costa Rica, Mexico, and Puerto Rico - there were only six Americans in all. The much smaller branch in Montevideo had only 15 staff in 1916. Three were Americans, including the branch manager and the manager of the credit department. The remaining staff included four Uruguayans, three Spaniards, two Englishmen, two Argentinians, and an Irishman. The cosmopolitan character of the overseas staff was evident for many years. The Retiro branch, opened in 1930 as the bank's third in Buenos Aires, had sections for Poles, Ukrainians, Yugoslavs, Czechs, Slovaks, Greeks, Armenians, Bulgarians, and Italians. Its polyglot staff could speak a total of 21 languages. 

Exposition in San Francisco becomes a turning point
In 1915, the Chinese government invited one of Li & Fung's founders, Fung Pak-liu, to join an official delegation to the Panama-Pacific International Exposition in San Francisco, the United States' trade gateway to Asia. Notably, San Francisco was the location of the only office in the United States, apart from New York, of the International Banking Corporation, which later became a wholly owned subsidiary of National City Bank. On the voyage home, Fung met Joseph Sipser of Ignaz Strauss and Co. Inc., a New York importer and sourcing agent for high-class U.S. chain stores, department stores, and mail-order companies. Sipser became a friend, and Ignaz Strauss one of Li & Fung's largest clients. The relationship lasted half a century. Thereafter, Fung visited the United States at least once a year.

South America attracts the ambitious
Foreign competition fuels demand for staff with international experience, as banking starts to go cosmopolitan
In the pioneering days of its Latin American network, National City Bank needed banking talent. It encouraged young men in New York to consider the foreign service with the bank as a career option. According to James Carter, assistant cashier at the Rio de Janeiro branch, success demanded certain qualities: personal ambition, patriotism, and a touch of missionary zeal. "The men who enter the foreign service of the Bank at this time will be far better off in, say, five years' time than would be the case if they had remained in New York," he wrote in the staff magazine in 1915. In addition to better remuneration, "they will find that they have acquired a certain kind of education that does not come from schools or colleges, and that they have so broadened themselves in mind and character." In Carter's opinion, New York offered an especially narrow view of the world. "What is necessary is to obtain a true perspective of life, to be able to look at any question from another man's viewpoint," the assistant cashier said. "I know of nothing else as valuable and conducive to that end as to travel and, better still, to live a part of one's life in foreign countries." As for patriotic duty, "our English and German brothers have so firmly established themselves in foreign countries that it will be a tremendous task for us to disturb them," Carter observed. The bank needed "young men with the characteristic energy and determination of Americans who are willing to devote their lives to the work before us ... We must pave the way for the United States exporter, we must provide banking facilities that will enable him to enter this foreign field at least on a basis of equality with the European manufacturer." 

Spanish and Commercial Geography prove popular
To meet the demand for Spanish-language instruction, National City Bank hired Chilean professor C.F. McHale to work as a full-time teacher in 1916. A graduate of the University of Chile and Institute of Pedagogy in Santiago, he had taught in high schools for seven years before moving to Europe. There he taught for a year in London and almost three years in Spain. McHale authored an English-Spanish dictionary of banking and business C.F. McHale, teacher terms for use not only in classes but also as a reference for interpreters and staff heading for Latin America. During the 1915-16 year, almost 150 staff were studying Spanish. Commercial Geography was taught by O. P. Austin, the former chief of the U.S. Bureau of Statistics, who was now statistician in the bank's foreign trade department. He introduced more than 100 students to the history of world commerce and offered detailed lectures on commodities ranging from agricultural products to iron and non-ferrous metals. "I have never had better attendance, attention or results in my many years of experience in university work," he said at the end of the first one-year course. 

IBC pioneers trade finance in Asia
A Connecticut state-chartered bank caters to companies doing business in the Far East
The International Banking Corporation (IBC) was founded in Connecticut in 1901 by a group of businessmen seeking to promote trade with Asia following America's acquisition of the Philippines from Spain. The bank's state charter allowed it to do business anywhere except Connecticut. The founding president was Marcellus Hartley, owner of the Remington Arms Co. Other directors included corporate lawyer Thomas Hubbard, investment bankers Jules Bache and William Salomon, along with representatives of the Equitable and Metropolitan insurance companies. Hubbard, who had previously worked as financial officer for Southern Pacific Railway, assumed the presidency following Marcellus Hartley's death in early 1902. After opening a branch in London in April 1902, IBC established branches in rapid succession in Shanghai, Singapore, Manila, Yokohama, and Hong Kong. It also hired two traders from Deutsche Bank to develop its foreign exchange business in New York. By 1904, the Asian network had spread to Calcutta and Bombay, Kobe, Guangzhou, and Cebu. Additional branches were established in the Chinese cities of Beijing and Hankou in 1909. More followed in 1918 (Java, today part of Indonesia) and 1919 (Burma and China), and others later in China and Japan. IBC was a commercial bank. A large part of its success in China rested on maintaining a close relationship with multinationals operating in China, such as American Trading, Shanghai Telephone, Standard Oil, and British American Tobacco. It received the US government's special encouragement and support, which allowed it to broaden its branch network in the region and begin expanding its business. IBC's business originated with the local subsidiaries of the bank's corporate clients, rather than with their U.S. headquarters. Much of IBC's business was trade-related, such as financing exports of raw silk and tea from China and Japan, cotton and jute from India, and tin and rubber from Singapore. From the Philippines came exports of hemp, copra, sugar, tobacco, and coconut oil. IBC was also involved in the import trade, financing Chinese imports of silver from the United States as well as Japanese imports of cotton from India and wool from Australia. The 19th century had seen a flow of Chinese immigrants to the United States. They worked on the construction of the railroads, and they were a source of labor for agriculture and many industries. Their remittances were an important source of foreign exchange for China, and many of them flowed through the IBC branch in San Francisco. 

Training graduates for careers overseas
Breadth of outlook is a requirement in young staff; but even the brightest need instruction in some of the basic skills
Acknowledging the continuing need for employees with commercial training along British and German lines for its expanding overseas network, National City Bank turned to the universities. It hired 20 graduates in 1915 and rotated them through departments for the first year. They attended three one-hour classes each day, notably in commercial geography, and the history of South America and its social customs. "Under this broadening experience, much of the native provincialism of Americans was dispelled," Number Eight, the staff magazine, reported in 1916. Other subjects in the curriculum were foreign exchange and the language of the country to which the graduates were being sent. After a year, however, the bank found some of the students were deficient in the basics. Elementary courses in penmanship and banking arithmetic were required. According to the staff magazine, the graduates had "awful" penmanship and, despite being able to handle analytic geometry and calculus, "were sometimes very slow in the matter of figuring interest." Of the original 20 men, 17 graduated. Together with two others who joined half-way through the year, the 19 members of the First College Class were in various regions of the world by late 1916. Ten were working at National City Bank branches in Latin America and five were at branches of the International Banking Corporation in Asia. Three were in New York and one in London. The success of the first year led to closer cooperation with universities and the recruitment of 42 college men from 24 universities in 1916, including 27 graduates. The rest were second-year students offered three months of training during the summer vacation with the promise of a career after graduation. The Second College Class of 1916 included Howard Sheperd, who would later become president and chairman of the bank. 

Vanderlip and the Liberty Bond
In May 1917, the staff magazine, Number Eight, declared: "LIBERTY is what the civilized peoples of the world are striving for. ... to this end has the federal government of the United States sought to enroll as subscribers each and every one of the citizens of this great DEMOCRACY in that gigantic offering - The Liberty Loan."
That same month, the Federal Reserve Bank of New York asked the bank's president, Frank Vanderlip, to organize publicity for the loan campaign. Given his earlier career in public service and public relations, Vanderlip was in his element and performed to such effect that in September he was asked by the U.S. Secretary of the Treasury to become chairman of the War Savings Committee. Vanderlip accepted the offer, taking an unpaid leave of absence from the bank. The experience of mass-marketing gained during the Liberty Bond campaign proved useful in later years when the National City Company under Charles Mitchell sold bonds in quantity to the general public. 

Merit becomes key to promotion
Appraisal systems are the basis for career progress; the City Bank Club is a center for education and social activities worldwide
In 1917, National City Bank abandoned the system of automatic salary increases at the beginning of January, relegating it to "the limbo of mid-Victorian business methods." From now on, salaries would be based on merit. At the same time, the bank announced a new staff appraisal system whereby all employees would be interviewed by an officer every four or five months. The new scheme was seen as an opportunity to address weak points in individual personnel records and to give staff the chance to air grievances in private. People were encouraged to take stock of their own work and try to see themselves as others saw them. The bank, however, was cautiously realistic in its approach, warning that this "occasional self- inventory" should not be taken to excess. "Too much introspection is as bad as too little," commented Number Eight, the bank's monthly staff magazine. In a speech at the Havana branch six years later, Charles Mitchell, who had become president of the bank in 1921, restated the bank's commitment to merit-based promotion. "I don't want to look outside of the National City Bank if we need a man to do a piece of work or a woman to take the head of some department ... I have asked the heads of department of this branch and I have asked them in New York and elsewhere to watch, and watch carefully, the work of each individual employee to the end that we may as rapidly as possible advance men and women according to their individual merit," he said. "I want you as individuals to help us build from within rather than from without." Mitchell said the bank also remained committed to bringing Cubans to New York for training. "We shall take on to New York more such men to the end that we may gradually elevate the standards of the Cubans who are in our organization as well as the Americans." 

Financing Japanese migration to Brazil
When Brazilian coffee growers faced labor shortages, they began to bring in Japanese workers. "Because of our branch connections in Japan, the State of São Paolo authorities approached us to arrange the financing," recalled Boies Hart, sub-manager at the São Paulo branch from 1918. "Before embarking, the immigrant received a contract approved by the Japanese authorities providing for three years employment after arrival in Brazil." According to Hart, the bank opened thousands of such credits over a three-year period. "The Japanese were the hardest-working laborers the coffee growers had ever seen," he said. However, when the contracts expired, many of the Japanese did not renew. They had better ideas. "They had bought or taken long leases on run-down or abandoned plantations on which they were able to drive shrewd bargains. These places needed only intensive work to bring them back to productivity." Through their own achievements and perhaps also partly as a reflection of Japan's rapid economic progress in the second half of the 20th century, Japanese Brazilians, once regarded as a pool of cheap labor, have come to achieve much higher social and economic status in recent times.

Express getaway
In February 1918, with German troops threatening a new advance, 10 employees from the Petrograd branch were ordered to take a train homewards via Siberia, secured by the U.S. embassy. It was lit by candles, but had a brand-new dining car with electric lights and a piano. Half the 60 Americans on board were from the embassy, and there were some 50 people from the Chinese and Japanese embassies. The train made several stops along the way, notably at Novo Nikoloaevsk, where the Americans chatted with recently released German and Austrian prisoners of war. After Irkutsk and Chita, the train entered Cossack "bandit" territory near the Chinese border. There it was held up. Local hospitality was such that passengers had no choice but to join Cossack officers for dinner and numerous toasts at a local nightclub. The group then journeyed through northeast China and Korea, reaching the Japanese port of Yokohama on March 25, a month and a day after setting out. They were joined the next day by the men of the Moscow branch who had traveled for three weeks on a separate train to Vladivostok. 

International Banking Corporation brings global dimension
IBC's international branch network makes it an eligible merger partner
In 1915, when National City Bank was operating in Argentina, Brazil, Cuba, and Uruguay, there was only one U.S. competitor in the region of any global significance: International Banking Corporation (IBC), a state-chartered bank from Connecticut. IBC's operations in Latin America were limited to Panama, where it had set up a branch in 1904 and served as the U.S. fiscal agent during the construction of the Panama Canal. Two branches in Mexico opened since 1903 had been closed due to the Mexican Revolution. Despite the IBC presence, president Frank Vanderlip was convinced that National City Bank would have the region "pretty much to ourselves," allowing it to grow organically. Not so in Asia, where IBC had built up a network of a dozen branches, having opened up in China, Hong Kong, India, Japan, the Philippines, and Singapore in 1902. It had a branch in San Francisco, America's gateway to Asia and home to sizable Chinese and Japanese populations, as well as branches in New York and London. Vanderlip decided to acquire it. When IBC's president Thomas Hubbard died in May 1915, National City Bank quietly began buying IBC shares. Jules Bache, a German-born investment banker and one of the original shareholders, was apparently one of the first to sell. By the time the story hit the newspapers towards the end of the year, National City Bank already had control of IBC. By 1918, IBC was a wholly owned subsidiary. Although Vanderlip was keen to bring the New York branch of IBC to the National City Bank headquarters, in fact, the two banks maintained separate identities for many years, especially in Asia where IBC's Chinese name was already well established as a solid local brand. IBC continued to open branches under its own name. However, in 1927, most of them dropped the IBC name and became part of the new Far East division of National City Bank. The acquisition of IBC was an early realization of Vanderlip's vision for National City Bank's international reach. It laid the foundations for the bank's operations overseas. In 1916, IBC earnings accounted for three-quarters of National City Bank's foreign branch income (the rest came from the branch network set up under National City Bank's own name, which by now extended to Chile). A year later, overseas assets of the combined banks had grown to $177 million, about a fifth of National City Bank's total assets.

National City Bank puts down new European roots
Despite war on the Continent, bankers see future business prospects
With the purchase of a controlling interest in International Banking Corporation (IBC) in 1915, National City Bank gained a European foothold through the IBC London branch, established in 1902. Although much of Europe was at war, National City Bank opened a branch in the Italian port city of Genoa in 1916. Before the United States entered World War I in 1917, U.S. representatives of the bank could still visit the territories of the "central powers" - the German, Austro-Hungarian and Ottoman empires, along with Bulgaria. The main motivation behind such trips was to assess likely postwar trade conditions, notably in Greece and Turkey, where companies such as Standard Oil and the American Tobacco Co. were active. With strong wartime demand from Germany, Turkey was also becoming an important producer of cotton. About 10 percent of the cotton crop was grown from American seed. The Brussels branch, opened in 1919 Bland Calder, secretary to the bank's vice president Charles Rich, visited the Turkish capital Constantinople (present-day Istanbul) as part of the War Relief Commission set up by the Rockefeller Foundation to help Turkish civilians. "We expected to find a dirty, poorly managed, disorganized city," Calder wrote later in the staff magazine. "We were agreeably surprised, however, to remark an air of good order throughout the city. In fact, if some of New York's streets were as clean as those in Constantinople, we could not complain." After war ended in 1918, the European network expanded with new branches in Brussels in 1919 and Antwerp, Madrid, and Barcelona in 1920 (the year in which National City Bank established a short-lived presence in the South African city of Cape Town). IBC, meanwhile, set up its own branch in Lyon in 1919. Two years later, National City Bank acquired the Paris branch of the Farmers' Loan and Trust Co., which had been set up in 1906. The bank's presence in northern Italy was expanded in 1925 with the opening of a branch in Milan. The European network was badly affected by World War II. It was not until Europe's recovery in the 1950s that it regained a more prominent role in the bank's overall operations. 

Russian Division Chief offered seat in Polish Cabinet
Following the emergence of a new Polish republic at the end of World War I, National City Bank employee Alexander Znamiecki was offered the position of trade minister in the cabinet formed by Prime Minister Ignacy Jan Paderewski in 1919. Znamiecki, who was then serving as the bank's representative in Warsaw, had been trained by the bank in New York and later became head of the Russian division of the foreign trade department. Between 1915 and 1917, he was a prolific contributor to the bank's monthly trade publication, offering detailed analyses of the Russian banking system and advice to Americans on how best to enter the Russian market.

The Vladivostok branch
Six months after the Petrograd and Moscow branches closed, the bank set up an office in Vladivostok in the Russian Far East. At the time, a U.S. Expeditionary Force was trying to protect Czechoslovak legions in Siberia at the end of World War I. Headed by former Moscow branch manager Henry Koelsch, the office was modeled on banks then operating in China. Opened in February 1919, it had a handful of American staff. A Chinese comprador and his nephew kept the books. Other staff included Russians, three Sikhs, and a Briton. Under instructions from head office in New York, the office was liquidated and closed in March 1920. The American force withdrew in April.

Russian venture is short-lived
The bank's president pushes forward into Russia; hopes are dashed by revolutionary upheaval and the collapse of the old empire
National City Bank's president Frank Vanderlip was bullish on Russia. In 1915, he sent Fessenden Meserve to Petrograd to secure a branch license in anticipation of postwar trade opportunities. Two vice presidents visited the following year, purchasing five million rubles' worth of czarist government bonds and arranging a $50-million bond issue. The Petrograd branch opened in the former Turkish embassy on January 15, 1917. In March, the Russian empire collapsed. Undeterred by the Bolshevik revolution on November 7, the bank opened its second Russian branch in Moscow's National Hotel on November 27. The timing was unfortunate. A month later, the new Soviet government declared banking a state monopoly and took over the branch. "They were quite decent about it," staff member Boies Hart wrote in his diary at the time. "All we have to remind us that we cannot do business is a funny little commissar who formerly made suits in the garment district of New York." Back in New York, Vanderlip had a major falling out with James Stillman, the bank's chairman. Stillman fell ill and died less than a month later. In February 1918, half the Americans from the Petrograd branch and all but two of those at the Moscow branch were ordered home by train. Most of the Americans remaining in Petrograd were evacuated to Vologda, where they set up a temporary branch, initially at the Hotel Hermitage. In August, they were expelled. The records were transported to Moscow and placed with the Swedish Consulate General. Meanwhile, the Moscow branch had moved to the International Harvester Co. offices after its premises were taken over by the Bolshevik newspaper Izvestia. On August 26, both branches were closed and the remaining Americans left Moscow. Vanderlip remained optimistic, however, and a new office was set up in Vladivostok. "The sway of Bolshevism is rapidly waning in Russia," he declared in May 1919. Less than a month later, he resigned as president under pressure from Stillman's son and fellow director William Rockefeller. Six days later, the Bolshevik security service, Cheka, raided the Swedish mission in Moscow, dynamiting two safes where valuables and records from the Petrograd branch had been stored. 

Stability revives interest in Mexico
A gap in the Latin American branch network is filled as an improved business environment attracts exporters and investors alike
Business with Mexico, Cuba, and other republics and colonies bordering the Caribbean Sea was overseen in head office by the Caribbean division. At the end of 1919, National City Bank's direct presence on the ground comprised more than 20 branches in Cuba, three in Colombia, two in Venezuela, and one in Trinidad. In addition, the affiliated International Banking Corporation (IBC) had two branches in Panama and five in the Dominican Republic. IBC's first branch in Latin America, opened in Mexico City in 1903, had closed in 1914 due to the Mexican Civil War, along with a second branch in Monterrey, established in 1904. When a Mexican constitution was passed in February 1917, National City Bank's management was quick to recognize a huge gap in the bank's regional presence. "Probably, the greatest field for our future operation is Mexico," vice president Samuel McRoberts said in a speech that month, noting the country's resource potential and close proximity to the United States. "When life and property can be considered permanently safe in that country, our capital and energy will flow." Growing interest in Mexico prompted Jose Romero, a member of National City Bank's foreign service, to write about future opportunities in the staff magazine a few months later. With more than 15 million people, he noted, Mexico had Latin America's second-biggest population (after Brazil). Its people had the region's third-highest purchasing power (after Brazil and Argentina), and it was the fourth-largest Latin American importer of U.S. merchandise (after Cuba, Argentina, and Brazil). Moreover, it was a major producer of cotton, coffee, sugar, tobacco, rubber, cacao, corn, wheat, fibrous plants, rice, and beans. By 1919, National City Bank was getting so many corporate client inquiries about Mexico that it sponsored a two-month tour of the country by Charles Jenkinson of National City Company, the bank's securities affiliate. Clients were mainly interested in export and investment opportunities as well as credit arrangements. They also wanted to be reassured that "the political situation has improved sufficiently to justify the effort," Jenkinson said. Ten years later, the bank finally opened its new Mexico City branch on August 5, 1929, the year in which a new political party was established, ushering in half a century of single-party rule. 

Branches in London
The original London branch of IBC was located at 36 Bishopsgate in the City of London, the British capital's financial district. During World War I, it arranged a three-month credit of $5 million to Russia in the form of an overdraft on the New York bank account of the Russian finance minister. The credit was used to buy war supplies for Russia, who entered the conflict after the Austro-Hungarian empire declared war on Russia's ally Serbia in 1914. After the war, in 1920, the bank opened a West End branch at 11 Waterloo Place to cater to visiting Americans as well as clients of head office and other overseas branches. In 1937, the City of London branch moved from Bishopsgate to 117 Old Broad Street.

First Russia, then Cuba: lessons in risk
Russia was an early lesson in sovereign risk. Although the total loss would eventually be less than $10 million, the combined assets and deposits of the nationalized Russian branches came to $33 million, more than 40 percent of the bank's capital. Any lesson from Russia was lost on James Stillman Jr., National City Bank's new president, who oversaw a rapid expansion in Cuba. By 1920, the bank had more than 20 Cuban branches. When sugar prices collapsed, the bank's exposure was $79 million, or 80 percent of the bank's capital. The younger Stillman resigned as president in 1921. 

A bank for all
In the 1920s, the American middle class was growing in numbers and prosperity. Institutions and wealthy individuals were familiar with traditional banking, but most people were less so, and had little knowledge of investments. Mitchell's approach was educational with regard to the nature of bonds and, at a later stage, stocks. National City Company's literature gave detailed information and was frank about the risks. The policy was to put the client's interests first, and Mitchell was convinced of the soundness of the company's practices. "We are going to make more exacting our yard-stick," he declared during a lecture to a banking class, "because the small investor who buys from us today a thousand or a five hundred dollar bond is not in a position to know whether that security is good or not and must rely on us. … But we recognize that as between ourselves and this small investor, the law of caveat emptor cannot apply, and that if we are to fulfill our trust, we must supply that which means safety and a reasonable return to him." Mitchell's vision was shattered by the Wall Street Crash of 1929, but his concept of a "bank for all" was to endure. 

New technologies bring communications revolution
National City Bank is at the forefront of radical changes in office methods
In the early 1920s, National City Bank had one of the largest telephone switchboards of any bank in the world. Of the 12 positions for operators, two were used by the International Banking Corporation and two by the legal firm Shearman & Sterling. National City Bank alone made an average of 40,000 outgoing calls a month, or about 1,600 calls a day. Supervised by Ethel Ketchman and her assistant Anna Buckel, the switchboard opened at 8:00 a.m. and closed at 6:00 p.m., except on Saturdays, when work finished at 3:00 p.m. Sixteen connections were maintained at night and on Sundays and holidays. In 1931, the bank inaugurated the world's largest private telephone system with 10,000 extensions and positions for 80 operators. It could handle 39,000 outgoing, 59,000 incoming, and 31,000 internal calls a day. The system took 40 men almost six months to install and took up almost an entire floor of the new City Bank Farmers Trust Building, home of the bank's recently acquired affiliate. Among the innovations was a system for transmitting messages via a network of pneumatic tubes. The tube room was in the basement of 55 Wall Street and could handle up to 1,100 messages a day. Six years later, the bank installed a new pneumatic system that could send 12,000 cartridges a day. As more and more office machinery was being used, the bank set up a machinery repair department with six repairmen. It was initially responsible for more than 600 typewriters, 200 adding machines, and 200 Dictaphones. Once regarded as a toy, the Dictaphone played an important role by the early 1920s, with about 30 Dictaphone operators working in the stenographic department.

Veterans of the air
Senior National City Bank officers have links with the young aviation industry and become pioneers of passenger flight
Senior officers of the bank were no strangers to air travel in the 1920s. George Kurz spent considerable time flying in Europe while posted in Berlin as the bank's representative to Central Europe and the Balkans during the 1920s. He once accompanied vice president F. Charles Schwedtman on a three-and- a-half hour flight from Constantinople to Bucharest, which would have taken more than 36 hours by train. William Hoffman, another vice president, got a first-hand look at the latest German aeronautical technology in 1929. He flew from Barcelona to Genoa via Marseilles aboard the new four-engined Dornier R4 Superwal flying boat that had just been delivered to German and Italian airlines. Back in America the same year, National City Company vice president Joseph Ripley joined United Aircraft and other executives on a 10-hour flight between Chicago and Cheyenne aboard the new three-engined Boeing 80 aircraft. The flight was part of efforts to develop a route from Chicago to San Francisco. Ripley was also a director of Pacific Zeppelin Transportation Corp., an affiliate of Goodyear Zeppelin Corp. which began building the world's largest airship, the ZRS-4, in Akron at the end of 1929. National City Bank director James A. Stillman and vice president Joseph Durrell gained first-hand experience of the hazards of air travel. When their flying boat failed to return to their camp as scheduled during an Alaska hunting trip, they were stranded with little food for two weeks and had to be rescued by boat. The plane they had used to reach the isolated camp was lost on another flight. 

Landmark deals
In addition to its vast network of more than 30 offices across the United States and Canada, the National City Company had offices in London, Geneva, and Tokyo. The international presence in key markets soon yielded results. In 1921, the company introduced the first Australian borrower to the U.S. market by arranging a $12-million issue of 20-year bonds for the state of Queensland. The bonds were snapped up by investors in a few hours. Two years later, the company arranged a $19.9-million bond issue for Oriental Development Co., the Japanese government agency responsible for developing Korea, who had been annexed by Japan in 1910. The 30-year offering was the first dollar-denominated issue for a Japanese borrower in the United States. Among domestic deals, the company set a world record in 1923 when it teamed up with the Guaranty Co. of New York to arrange a $100-million issue of bonds and debentures for a leading copper and mining company. Proceeds of the deal, the largest industrial financing in the world at the time, went towards the company's acquisition of a majority stake in a Chilean copper company, which controlled the most extensive and one of the most valuable known copper reserves in the world. Proceeds were also used to acquire the capital stock of the U.S. brass company, which at the time was the world's leading manufacturer of copper and brass.

A force for unity
President Charles Mitchell was emphatic as to the value of the City Bank Club. In an address in New York in 1921, he declared, "Our club stands for the development of the individual and the development of the cooperative spirit. These two things carry our organization forward, to a higher ideal and a higher purpose. The Club stands for National City unity ... If the Club can develop each member to be bigger and better, the National City Bank, the National City Company, and the International Banking Corporation will be even better and stronger institutions." 

Understanding a bank
As the bank expanded its retail business, it created six advertisements explaining to the public aspects of banking such as the Federal Reserve System. The "Understanding a Bank" series was published in New York newspapers in 1921 and reproduced by banks in other states such as Connecticut, Kansas, and Florida at their own expense. To educate the banking public, eight banks in Columbus, Ohio, published the series in the local press. 

Niche marketing
Second National Bank, acquired in 1921, had the distinction of being the first bank in New York to provide separate banking services for women. National City Bank soon followed, setting up a women's department in the recently opened 42nd Street branch. Headed by one Helen Carroll, it offered not only regular checking accounts and financial guidance but informal advice for women from out of town. The staff magazine reported the case of one customer unhappy with the hotel where she was staying. "Miss Carroll offered several suggestions regarding hotels, shops and plays then running ... A few days later the woman called at the Bank again and told Miss Carroll that because of the helpful suggestions offered on the occasion of her previous visit she had decided to open an account with us, which she did." 

Retail branch is "beacon of thrift"
Starting on New York's 42nd Street, the success of the compound interest department opens up new avenues in retail banking
National City Bank acquired its first domestic branches in 1921 through a merger with Commercial Exchange Bank. Founded as the German Exchange Bank in 1872, this state-chartered bank changed its name during World War I and had three branches by the time it converted to a national bank, allowing the merger to take place. One of National City Bank's new branches, on 42nd Street, set up a compound interest department at the end of 1921. The bank said it was "now prepared to serve the banking needs of every element of the population." Anticipating strong interest among New Yorkers born abroad, the department hired staff who could speak several foreign languages, including Italian, French, Spanish, Greek, Polish, Russian, German, and Chinese. This unprecedented drive into retail banking was such a success that the new branch, in a prime location near Grand Central Terminal, was soon being described by the bank as a department store." At lunchtimes, thousands of depositors working in nearby stores and offices would flood the branch, which had both street and subway access. To attract new customers, an account could be opened with as little as a dollar, and interest at 3 percent compounded monthly was paid on deposits as small as $5 within the first month. Depositors who wished to put aside a moderate amount regularly were encouraged to believe that they were clients of National City Bank just as much as the traditional customer with many thousands in a checking account. All the facilities of the bank were available. In early 1923, the bank set a target of 100,000 new compound interest accounts for the year. It held a six-week competition in which 3,041 employee contestants opened 45,226 new accounts with $3.3 million in deposits. The winner, with 320 new accounts and more than $86,000 in deposits, was Charles Caggiano, who was promoted to the branch's new business department. Among the other top 10 winners to receive watches from president Charles Mitchell were two women, Louise Keller and Anna Chiarchiaro, and Lee Fook from the Chinese draft department of the International Banking Corporation. In 1923, compound interest department service was extended to all local branches and to head office. 

The New York branch network expands
Through mergers, National City Bank acquires a number of branches and builds more, becoming a force in retail banking
In the early 1920s, National City Bank was making a conscious effort to build a retail business. The year 1921 saw the acquisition of the Commercial Exchange Bank, and three domestic branches as part of the bargain. One of these was the 42nd Street branch. Vice president Thomas Reynolds described the new approach to business there: "We are actively interested in individual accounts, balances of which average $500 or more, and are making a consistent effort to develop this type of business, along with the larger accounts that come from business houses." A second acquisition followed in the same year. The merger with Second National Bank, which was founded in 1863 and in which the Stillman family held a controlling interest, brought into the National City Bank network a branch at 28th Street and 5th Avenue. Second National Bank's core client base was the textile and other manufacturers located between 23rd and 34th streets. The year 1924 thus saw National City Bank represented by branches at 42nd Street and Madison Avenue; at 28th Street and 5th Avenue; at the Bowery branch; at 57th Street and 7th Avenue; and at 72nd Street and Amsterdam Avenue. The growth of the network did not stop there. Following a change in the law that allowed national banks to have full-service branches as long as they conformed to state law, by the end of 1929 National City Bank had 37 domestic branches in Manhattan, Brooklyn, Queens, and the Bronx, the fifth-largest domestic branch system in the country. Some of the branches were distinctive architecturally. The Art Deco-style former Canal Street/Broadway branch, which is still standing, was opened in 1927. It is not hard to see a family resemblance between this and its grander cousin in Buenos Aires, opened in 1929. Underlying this domestic expansion was the wish to offer every customer, in the words of the staff magazine Number Eight, "the same worldwide banking, investment and trust facilities that have been developed at Head Office, 55 Wall Street" and so make banking "as simple as buying a dress, a pair of gloves or a piece of furniture." 

Employee clubs mushroom
Founded in 1904, the City Bank Club was not only the center of staff education, but provided social activities too. Its monthly magazine, Number Eight, was named after the National City Bank designation at the New York Clearing House. The magazine was often used by management as a way of communicating to employees. From the time the bank started opening branches in Latin America, local chapters of the club sprang up overseas. Club activities later took root across the United States in the offices of the National City Company, the securities affiliate that also had clubs in Britain and Canada. Clubs at International Banking Corporation were limited at first to the branches in San Francisco and Spain. By 1922, the City Bank Club had almost 1,500 members abroad, mostly in Latin America, and almost 500 in U.S. cities other than New York. The biggest were in Havana, Buenos Aires, London, Rio de Janeiro and Chicago. The club in Rio was among the first to launch a staff magazine outside New York. When the club marked its 25th anniversary in 1929, it had more than 6,000 members in New York and 11,000 worldwide. Activities took many forms. In 1932, for example, the Barcelona club began a series of lectures on economics and finance, while Japanese club members in Kobe launched an English Oratory Society. 

Workers under pressure
Operations in the tube room were initially handled by a single man. In 1922, Ambrose Rickeman relayed over 1,000 cartridges a day through a network of brass tubes connecting 30 departments. A message could be sent from here to the seventh floor of the International Banking Corporation building at 60 Wall Street in two seconds. Each cartridge had a removable brass ring with numbers indicating the department of the addressee. Cartridges popped into the tube room at an average rate of two a minute, more in busy periods. The system was estimated to be doing the work of 50 messengers. Working in the tube room was "like playing a piano," Rickeman said. "When you know a piece you don't have to watch the keys." Employees handling telegraph traffic were under similar pressure. Most messages were coded or so brief as to be entirely unintelligible to the operator. "It is no wonder then that men engaged in this meaningless work should become mechanical," bank telegrapher C.V. Trapp wrote in 1912. "The telegrapher is engaged in a very nerve-wracking business." Operators, facing criticism for the slightest error, handled high volumes of messages for up to 14 hours a day. "No wonder they are sometimes driven to drink," Trapp commented.

Plane beats ship en route to Cuba
On January 16, 1922, president Charles Mitchell and chairman Eric Swenson, together with Percy Rockefeller, arrived at Key West in a private car on the first leg of a journey to Havana. When they learned that the crossing to Cuba would take them around 10 hours by steamship, they chartered an Aeromarine Airways air cruiser, the Ponce de Leon, and made the flight in 70 minutes, a record for that route. The group arrived in Havana before the steamship had left its berth at Key West. Although the last part of the trip was made in driving rain, all of the group said they were delighted with the "swift and fascinating flight across the water." The journey took place fully five years before Charles Lindbergh crossed the Atlantic, and ten months before Amelia Earhart set an altitude record for female aviators. 

Chinese banker sees big future for National City Bank in China
A multinational staff brings new perspectives; overseas talent is brought to New York
National City Bank brought bright young people with potential to the head office from overseas, even if they were not necessarily employees. In 1923, visitors included four honor students from Europe and China. As well as rotating through the various departments of the bank and its securities affiliate, National City Company, the four took courses at the American Institute of Banking. Three of them - from Norway, Sweden, and Denmark - had been awarded National City Bank scholarships by the American-Scandinavian Association. The fourth was chief accountant at a banking corporation in China who later penned an article for National City Bank's staff magazine in which he urged the bank to familiarize American businesses with Asian markets and the foreign investment climate in China. "The National City organization has played an important role in fostering American trade in China through its subsidiary company, the International Banking Corporation," the Chinese banker wrote. "During its 20 years of service, American trade has been multiplied more than 10 times." American influence in China, he said, was being felt by both the British and the Japanese. "The favorable position in which the Americans are now placed may be reasonably attributed to the goodwill of the Chinese people and in no less an extent to the expert service rendered by the National City organization," Tsiang said. "It is to be hoped that American business men will take this opportunity to push their trade interests in China ... In the advancement of this program, the National City organization is again called upon, because of its years of experience in the trade with China, to bring the American business public to a true understanding of the Oriental market and acquaint them with the advantages of foreign investment in China for industrial purposes." 

Man in commercial credit saves Chinese name
When the English-language name of the International Banking Corporation was replaced by that of National City Bank in 1927, the branches in China retained the old Chinese name. Huajiyinhang, literally "Flower Flag Bank," referred to the 48 stars on the American flag and thus effectively meant "Bank of the United States." In 1944, the staff magazine reported that a suggestion had been made to change the Chinese name to "something more practical and less imaginative." Donald Woo of the commercial credit department intervened. He had been involved with the bank in both America and China. At Woo's suggestion, "it has been decided to retain the words now symbolic of a great banking institution." Half a century later, a senior Chinese official told a visiting Citibank chairman that "the Chinese name is better than the English name." Among foreign brands translated into Chinese, another senior official said, it was second only to Coca Cola. 

Pioneer in Panama
In 1928, Elida Arias was appointed as subaccountant of the Panama branch of National City Bank, and so became the only woman among approximately 500 signing officers of the bank worldwide. This was particularly remarkable as, according to Number Eight, the staff magazine, "the feeling in Panama, as in all Latin-American countries, has, until recently, been strongly averse to women entering the business world, and … because of the fact that Miss Arias was not forced by circumstance to earn her own livelihood." Arias joined the Panama branch when it was still part of the International Banking Corporation network. One of her co-workers was Miss Selma Arosemena, daughter of the president of Panama. According to Number Eight, she, like Arias, "wished to be graduated also from the more narrow confines of purely household duties."

City Bank Farmers Trust Co.
City Bank Farmers Trust Company was a product of the consolidation of the trust organizations of Farmers' Loan and Trust Co. and National City Bank. The trust company, the oldest in America, was formed in 1822 by a charter granted by the New York state legislature. Until 1835, it was known as Farmers' Fire Insurance and Loan Co. From 1823 to 1835, it had quarters in the original Merchants' Exchange Building on Wall Street, until it was destroyed in the Great Fire of 1835. Moses Taylor became a director in 1843, and there had always been a high level of cooperation between the companies. The merger was ratified by the boards of both companies on June 29, 1929. The president of the new organization was to be the trust company's James Perkins, who was later to prove his worth as a steady leader of the bank during the Great Depression. 

Support from overseas
Much of the profit made by National City Bank overseas came from foreign exchange business. The biggest foreign exchange market in Asia in the 1930s was Shanghai. The best trader in town was John "Red" Reed, whose working style was described in Fortune magazine in 1946: "In the golden age of extraterritoriality, Red kept three telephones on his desk; the sight of him manipulating them while leaping from Chinese fapi to Manchurian yen, from Hong Kong dollars to Bombay rupees, from gold bars to silver Mex, all the while covering himself by buying or selling dollars on New York, sterling on London, gold on Bombay, was one of the memorable spectacles of the China coast." Reed was credited with earning huge profits for the bank in the 1930s. Between 1934 and 1938, the Chinese branches earned more than $7 million - almost 40 percent of the gross earnings remitted to New York from all overseas branches during the same period. In one difficult year, it was the Shanghai earnings that allowed the bank to maintain its dividend.

Challenges at the Mexico City branch
According to John Arnold, who spent five years working at the Mexico City branch, arriving in 1930, most of the bank's business there consisted of financing imports from the United States and handling remittances from Spanish immigrants back to their native country. The manager was Bill Richardson, previously at the Genoa branch in Italy. Arnold said that it was thanks to Richardson that the branch survived the early years. In response to discriminatory measures against foreign banks in Mexico, two Canadian banks, one German, and one British bank had closed their doors. "We remained the only foreign bank," Arnold recalled. "Instructions came from head office to close our branch but Bill held out and was finally allowed to keep it open on a wait-and-see basis." Other challenges included financing a shipload of corn from Egypt, which had to be re-routed to New Orleans when Mexico banned corn imports. One trainload of bananas intended for America went rotten when the locomotive broke down. Since managers went to extreme lengths to avoid reporting losses during the Great Depression, Richardson docked the salaries of the branch officers. A few years later, the banana exporter paid off the loan. "Bill then declared a very welcome dividend to the officers," Arnold said.

Early pacesetter
When he died after a long illness in 1930, Lee Fook, former head of the Chinese draft department at International Banking Corporation, was eulogized by the bank as both a "leader and pacesetter," not only in the department but more widely as a financial adviser to the Chinese population of New York. According to the staff magazine, "old and young, alike, had implicit faith in this amiable man ... and came to him with their money for investment and transference to their relatives in China." Born in Guangzhou in southern China in 1883, Lee became associated with IBC in 1906, two years after the bank started operating in that city. When the Asian branches of IBC were absorbed into National City Bank as the Far East division in 1927, Lee was transferred to the foreign tellers department. Six officers of the bank acted as pallbearers at Lee's funeral in New York's Chinatown on September 3, 1930. According to the staff magazine, "all of Chinatown mourned his death."

Whirlwind tour, 1930-style
In 1930, vice president Joseph Durrell made a tour of Latin American branches. From Mexico City, he flew to Panama, Lima, Santiago, and finally Buenos Aires aboard various Pan- American aircraft with numerous stopovers. One stop was at the Colombian port of Buenaventura, from where Durrell took a train to the Cali branch. From Buenos Aires, he flew New York, Rio and Buenos Aires Lines (NYRBA) to Montevideo and several Brazilian cities including Recife, where he boarded the Graf Zeppelin for New York. In 1934, Durrell set out on a similar tour not only to Latin America but also Europe by taking the Graf Zeppelin from Brazil to Germany. In this illustration, the solid black line indicates the Pan-American Line and the dotted line NYRBA; the arrowheads indicate the German Condor Line; and the double solid lines from Pernambuco (Recife) to New York show passage on the Graf Zeppelin airship.

The bank embraces air travel
While airmail shrinks the globe for business, senior managers embark on whirlwind branch tours in Europe and South America
In August 1929, National City Bank chairman Charles Mitchell received a letter from the Tokyo branch. It had come by way of the Graf Zeppelin, a German airship, on the Tokyo-New York leg of its first and only round-the-world flight. The letter had taken just eight days to arrive, a new record. Earlier that month, a branch inspector, J.F. Cannon had accompanied journalists on the maiden flight by the New York, Rio and Buenos Aires Lines (NYRBA) between Santiago and Buenos Aires. The trip took 10 hours and involved two stopovers in the Argentinian cities of Mendoza and Cordoba. The Cordoba stopover was soon dropped, reducing the flight time to seven hours, a huge improvement over the 35-hour journey by train. In February the following year, president Gordon Rentschler received a card from the Recife branch in Brazil marking the inauguration of a new air-mail service between North and South America. It had taken 10 days and numerous stops on multiple aircraft to complete the 8,000-mile journey from Santiago to Buenos Aires and then up the coast of South America and across the Caribbean to Miami. Here, the mail was transferred to a train bound for New York. The eight-and-a-half days it took NYRBA Lines to fly between Buenos Aires and New York was 11 days better than the best any steamship could achieve at the time. The bank saw the commercial advantages of air transport for staff. Three weeks after NYRBA Lines launched its weekly service between Buenos Aires and Miami in 1930, Cannon and fellow branch inspector Malcolm Murrie joined the Recife-Miami leg. They were among the first regular passengers to use the service, which involved multiple flights on Sikorsky and Commodore flying boats. "There is no doubt that airplane passenger service is here to stay, for each month sees an increase in passengers carried," Cannon said.

Virtuoso of the adding machine
With new technology came new competitions, notably the Annual Adding Machine Contest sponsored by the American Institute of Banking. In 1931, Robert Hartley of the analysis and interest department of National City Bank won the contest for the fifth time in a field of 52 contestants. In correctly adding the figures for 150 checks in 2 minutes and 3.2 seconds, he shaved 5.2 seconds off his previous record. For his effort, Hartley was presented with a $20 gold coin by the Burroughs Adding Machine Co. 

Building to impress
When it opened, the very scale of the City Bank Farmers Trust Building was a cause for celebration. The whole building weighed 150,000 tons, including over 20,000 tons of steel. The electrical supply alone required nearly two million feet of wiring, and water was piped through eight-and-a-half miles of piping. The vaults were protected by the world's most elaborate security system, developed from vibration detectors used for submarine detection in World War I, and carefully tuned so as not to respond to the rumblings of the nearby subway. The telephone system was planned to accommodate 10,000 extension lines, 800 central office trunks, 800 tie-lines, and 80 operating positions. Its design capacity was 39,000 outgoing calls, 59,000 incoming calls, and 51,000 inter-office calls daily. 

Tent in Tuxedo Park
The first night of the 1931 tour was spent in a field in Tuxedo Park, an upscale neighborhood in the state of New York where the bank's president Charles Mitchell had a house. He and his wife visited the group for a send-off, inspecting the truck provided by the foundation. It could be converted in eight minutes into a "tent house" with beds, tables, chairs, gasoline stove, refrigerator, and running water. Nick Clute later recalled, "One of the things Mitchell said, which I always remembered, was that he wished he had nothing to do for the next six weeks but go around the country and see things and learn about industrial America."

(Nearly) tallest building in the world
The ambitious spirit of Manhattan is embodied in the soaring new home of National City Bank's trust affiliate
The City Bank Farmers Trust Building was opened on February 24, 1931. When the plans were filed, it was expected to be the tallest building in the world. However, on completion it had to be content with fourth place, the record having been taken briefly by the former Bank of Manhattan Building and then the Chrysler Building in 1930, both of which were soon overtaken by the Empire State Building. The building was nevertheless a marvel for the time, faced mostly with white Rockwood Alabama stone, towering 745 feet into the clouds and extending 63 feet below ground. The architects, Cross and Cross, adopted a restrained Art Deco style typical of Manhattan at that time. The site had been home since 1866 to the trust company, known before acquisition by National City Bank as the Farmers' Loan and Trust Company. The new building allowed practically all the downtown departments of National City Bank, City Bank Farmers Trust Company and National City Company to be accommodated in close proximity to one another within it and at 55 Wall Street, to which it was connected for a time by a bridge at the eighth-floor level. Carved into the entrance arch were images of coins of the day, representing the United States and countries where National City Bank had major branches. Carved medallions showed the seals of the bank and National City Company, as well as figures representing commerce and transportation. From the eighth floor, stone human heads looked down, representing "giants of finance." During the first two days of operation, the lower floors received some 25,000 visitors. 

Learning from the clients
Getting out of the office, young bankers of promise visit 40 industrial facilities during a trip that makes an indelible impression
The best understanding of U.S. industry was not to be attained by sitting in the office. That was the view of National City Bank. So it teamed up with the Thorne Loomis Foundation to offer several of its brightest young bankers a first-hand look at industry over the course of a six-week camping tour. Successful candidates had to have been with the bank for some time and were put forward by supervisors as being "men of promise and of demonstrated executive abilities." The tours were organized by the foundation, which was run by physicist Alfred Loomis and his brother-in-law Landon Thorne. The pair had recently teamed up to acquire investment bank Bonbright and Co. The first trip took place in mid-1931. Ten men between the ages of 18 and 25 took part, including future vice chairman Howard Laeri and Henry Lansing Clute of the foreign tellers department. Led by Bob Emison of the credit department, they set out in a specially equipped truck. Over the next six weeks, the men visited more than 40 facilities in 12 states, mostly in the South and Midwest. They met with senior managers of corporate clients and taking notes was compulsory. Although there were diversions such as flying in Detroit and visits to famous sites in Washington, D.C., the schedule was grueling. "The poor fellows were exhausted ... and the truck was not the speediest thing in the world," said Lewis Cuyler, who later ran the personnel department. "They went through hell with very little sleep ... Bob Emison was always getting them up early in the morning and with an early start it was packing in too much." Clute nevertheless had fond memories of the 4,350-mile journey. "It was a unique experience," he said. "In the six weeks, we saw steel mills, a cannery, wire manufacturing, tire manufacturing, a coal mine, a rayon plant, a chemical plant, a cigarette factory, a cereal maker, a textile mill, a glass factory. Those things certainly left an indelible impression on me and gave me a look at industrial America that I probably wouldn't have been able to obtain in the next 10 or 15 years just working at the bank."

The end of National City Company
Like the foreign branches, National City Company, the securities subsidiary, was still profitable during the Depression. However, following substantial staff cuts in 1933, it was no longer the institution it once was. By 1934, the company's annual operating budget had fallen to $2.5 million, down from $3.6 million in 1933 and $4.6 million in 1932. Its business was largely confined to selling federal, state, and municipal government bonds to banks, institutions, and large investors in America and Europe. The company had moved to premises more remote from the National City Bank head office, and none of its officers or directors were now affiliated with the bank. Six months after the annual meeting of 1934, the company was voluntarily dissolved to comply with a provision in the new Banking Act of 1933 (the Glass-Steagall Act), whereby banks were not allowed to own securities firms in the United States. This restriction would not be lifted until 1999, a change that permitted the full implementation of Citicorp's merger with Travelers Group.

Banking in the Great Depression
The reassuring style of National City Bank's new chairman, James Perkins, suits the uncertain mood of the times
In 1933, the United States was struggling with its deepest economic downturn ever. Despite its size, National City Bank was not spared the massive runs on deposits that were taking place at banks across the country. According to James Perkins, who succeeded Charles Mitchell as the bank's chairman in 1933, average gross deposits fell from $1.26 billion in the week ending February 18 to $967 million in the week ending March 25. Speaking at the annual meeting of shareholders in early 1934, Perkins acknowledged that the situation had been "acute," but noted that by the end of 1933, deposits had partially recovered, to $1.12 billion. Four years after the 1929 crash, however, the Great Depression was still taking its toll on the bank. Operational systems had been reviewed, expenses had been reduced by more than $1.5 million, and executive salaries had been cut. Moreover, no management fund or other extra compensation plan for employees had been in place for three years. Since becoming chairman, Perkins had persuaded the board to set aside an additional $30 million as a contingency reserve and cut the dividend from the annual rate of $2 a share to $1 a share. Yet the bank was still profitable, especially the foreign branch network, which was maintained largely intact under Perkins' tenure. Perkins was not always a believer in overseas branches. During the bank moratorium of 1933, declared by President Roosevelt to prevent a bank run due to lack of public confidence, National City Bank's competitors predicted that the overseas branches would bleed the bank dry of funds. However, such was public trust in National City Bank, that during the closure in the United States the overseas branches showed a shrinkage of less than 2 percent in their deposits. One day, Joseph Durrell, head of the overseas division, showed a gloomy Perkins offers of assistance from friendly competitors, as well as the previous night's reserve sheets, indicating that the bank's cash balance abroad amounted to 73 percent of its branch deposits. At that moment, Perkins became a staunch supporter of the overseas division. Perkins reported, "Under anything like normal conditions the foreign branches make handsome earnings and contribute largely through their services to the building up of domestic deposits." Foreign exchange earnings were said to be particularly brisk in China, which used a silver rather than a gold standard for its currency and was largely shielded from the global downturn. Although the U.S. economy improved during the 1930s, it took more than a decade for the country's gross domestic product to return to its 1929 level. 

The right man at the right time
James Perkins was a seasoned banker when he joined National City Bank in 1914. He worked as executive manager from 1916 to 1919. During World War I, he served in France and, for a time, ran the American Red Cross operation in Europe. For his overseas service, he was made an officer of France's prestigious Légion d'Honneur and a commander of the Order of the Crown of Belgium. In 1921, he joined the Farmers' Loan and Trust Co. as president, and when they merged with National City Bank in 1929, he became a director of the bank. He became chairman of both the bank and the trust company after Charles Mitchell's resignation in 1933. He died of a heart ailment in July 1940. According to the New York Herald Tribune, Perkins "inspired confidence at a time when that was the most desperately needed commodity in the financial world." Perkins was aware of the impact of recent events on employee morale. "Employees," he said, "should not try to defend the past nor should they stay home in shame. They should get out, face the music, and speak of the future National City Bank." The quiet, conservative James Perkins was the right man at the right time. When he came to National City Bank in 1914, deposits were just over $274 million. The last financial statement of the bank before he died put them at nearly $2.8 billion.

Trade marches onto the screen
In early 1937, National City Bank's advertising was extended to motion pictures with the release of a film featuring the bank's international network. By the middle of that year, the movie, entitled The March of Trade had been seen by thousands in the United States and Latin America, and plans were in place for screenings in Asia. Strongest demand for the film came from correspondent banks and schools and colleges, including Dartmouth College in New Hampshire. 

Branch manager foils international swindlers
In 1938, officers at the head office in New York grew suspicious when an American tourist returning from Mexico said he wanted to transfer funds to the country for a business venture with some "gentlemen" he had just met at a Mexican hotel. Despite warnings of possible fraud, the man purchased a $30,000 draft drawn on the Mexico City branch. After the tourist flew back to Mexico and presented the draft, branch manager Bill Richardson insisted that he allow three bodyguards to accompany him to his hotel for the handover. After initial objections, the prospective business partners reluctantly agreed to the traveler's meeting them with his protectors. Richardson's fears were justified. By the time the customer reached the hotel with the cash, the group had fled, leaving an unpaid bill. Police were called in and soon arrested five members of what was described as an "international band of swindlers." Richardson received a letter of thanks from president Gordon Rentschler. 

Taking the train
George Moore was typically on the road for a week every month. For a trip to Chicago, he would leave Grand Central aboard the Twentieth Century Limited on Sunday afternoon and leave for home on Friday night. "In a normal week in Chicago, one could have 50 contacts, about 10 a day, one for each breakfast, lunch, cocktails and dinner, with three calls in the morning and three in the afternoon," he recalled. Trips beyond Chicago, as far as Denver or Los Angeles, could take two weeks. "Longer than two weeks away was discouraged because you lost touch with head office."

The importance of client relations
Getting the basics right is the secret of success for George Moore, as he looks after clients in the Midwest of the United States
The future president of the bank, George Moore, began his rise in the domestic division in 1938 as a lending officer for the Midwest district. Each district in the division had a row of desks on the "platform" overlooking the huge banking floor at 55 Wall Street. The job involved extensive train travel. As Moore recalled in his memoirs, "you were a migrant worker." Trips to Chicago involved clients as diverse as Motorola and United Airlines, and machinery makers such as Caterpillar and International Harvester. Other big clients included milling giants such as General Mills and Cargill in Minnesota; and agricultural leader Monsanto in St. Louis, Missouri. Along with the "approved names" - companies with whom New York wished to do business - there were calls to correspondent banks and prospective clients. In a memo in 1952, by which time he was heading the bank's national division, Moore urged calling officers to take note of large factories spotted on trips and to look them up on their return to New York. Potential new clients could also be found by looking up names of unknown companies traded on local stock exchanges and asking local contacts who was "coming along" in the local business community. Before making any visit, George Moore insisted on mastering all the information the bank had about the business. "You flatter a man when you show you've read his annual reports and quarterly statements," he said, noting that the United Airlines president once joked that Moore was the only person who read his message to shareholders. He also advised his staff to visit the assistant treasurer of companies if the treasurer was out of town. He stressed the importance of follow-ups, focusing on personal ties with businessmen and their families and secretaries. "I always sought an opening that gave me an excuse to write the people with whom I made contacts on calls," he said. So Moore sent his clients everything from copies of speeches he made every year to tips on tailors in London or hotels in Athens. "The idea was to find something to send him that he would be glad to get. 

Locked out of Spain by a telegram
George Moore thought the decision to sell off overseas branches before the United States entered World War II was not as clever as it had seemed at the time. One consequence was that, unlike some competitors, the bank did not have the automatic right to return once the war was over. As in Italy and Belgium, the bank was no longer present in Spain, where it had once been among the top four banks and had continued to operate during the Civil War of 1936-1939. When war broke out in the rest of Europe in 1939, New York decided to close the Spanish branches, offering them to a local bank - on condition that the acquirer took over the liabilities. The local bank agreed, but suggested National City Bank keep a corporate shell in Spain, with one peseta in deposits and a single employee whom the local bank would supply at no cost. That would have allowed it to resume business after the war without any approvals. But New York rejected the offer. "We won't want to come back," head office said. Noting that the bank remained locked out of Spain until 1978, Moore estimated the cost of that "foolish telegram" at half-a-billion dollars in lost potential earnings. "The moral to this story is that you should never close a foreign office if you can possibly keep it open. Leave a shell, a token to keep your options open and your franchise available, just in case." 

Advertisement flown overnight to Europe
The Boeing 314 long-range flying boat started regular flights across the Atlantic in 1939. Within weeks, the bank's advertising department seized a new opportunity. The semi-annual report for the six months to June 30 had just been published in U.S. newspapers and other publications on Thursday, July 6. To get it to the London and Paris newspapers as soon as possible, printing plates were flown on the new "Yankee Clipper" to Europe overnight. The Pan-American flight took off from New York on Saturday. On Sunday it arrived in Southampton, where the bank's London supervisor was waiting. By the time the flying boat was half-way back across the Atlantic, the financial statement had been published in newspapers such as The Times and the Financial Times in London, and the Herald Tribune in Paris. This was an advertising first.

Dedication to duty
The expansion of the New York retail branch network brought the bank into contact with a world it had not known in its first 110 years as a largely corporate bank. In 1940, a young trainee by the name of Newt Cutler was being rotated between various departments in the bank. While in the domestic inspection department of the comptroller's division, he was assigned to a team ordered to make a surprise inspection of the bank's Greenpoint branch in Brooklyn at 8:30 one morning. Cutler showed up at the appointed time and waited for his colleagues. No one appeared. He waited and waited. At 8:50 a.m., he decided to take matters into his own hands, figuring that orders were orders and that he might as well at least start the audit pending the arrival of the rest of the team. The trainee presented himself at the door, announcing a surprise inspection. After being admitted, he sealed up all the tellers' cages and began counting their cash. There was still no one else from the domestic inspection department. About 10 minutes later, an officer of the bank approached Cutler. "Young man, just where do you think you are?" the officer asked. "The Greenpoint branch of the National City Bank," replied Cutler. "I have news for you," the officer said. "This happens to be the Greenpoint Savings Bank." 

War returns to Europe
The early stages of World War II pose challenges for Citibankers in Paris and London, as they face invasion and aerial bombardment
The National City Bank business in France was one of the bank's more successful operations in Europe. Major U.S. clients of the Paris branch were Standard Oil, International Harvester, American Radiator and United States Lines. French clients included industrial companies in Lille and silk companies in Lyon. The main sources of income were commercial overdrafts, discounting trade bills, and foreign exchange. Harvey Gerry, who worked in both the Paris and Nice branches between 1931 and 1939, recalled that the bank was very competitive in this market. When German troops invaded France and advanced towards Paris in June 1940, the bank evacuated the branch and relocated to Le Puy, a small town in the mountains of south-central France, which was in the unoccupied zone. "Cash, securities, and files were transported in a truck," Gerry said. "Books, machines, and personnel were crowded into three other trucks." The trip took two days. Of 250 employees, about 50 found their way to Le Puy, where a new branch was set up at the Hotel Bristol, which also provided living quarters for much of the staff. Head office decided to liquidate the French business, although operations in Paris had to be partly resumed to contact those clients who were still in the occupied zone. After the bank had paid indemnities to employees and helped them find new jobs, the number of staff in Le Puy and Paris was progressively reduced to about 20 overall. Before two-way passes between the occupied and unoccupied zones were issued, Gerry recalled that one staff member was said to have crossed German lines in a mailbag.

Linking two continents by radio
New technology extended past working hours. In 1940, the bank arranged for the National Broadcasting Co. to transmit its annual Christmas party by short-wave radio to branches in Latin America. The live broadcast, including carols sung by the bank's choral society, reached over 2,000 bank employees in 42 branches. "The annual Christmas greeting of the Chairman of the Board was heard as distinctly in Brazil and the Argentine as it was in the Head Office in New York," the bank said in an advertisement promoting the Latin American business. "In spite of wars across the ocean, and, indeed partly as a result of these wars, the Americas are daily moving closer."

Know your customer
According to Harvey Gerry, "Paris was a place where one had to be on his toes about strange people." On one occasion, he spotted a small man hurrying into the branch and dumping a pile of banknotes in front of the clerk, asking for $25,000 to be cabled to an account to be opened in his name at the National City Bank head office in New York. "When we asked for credit references, he couldn't produce anything satisfactory so we declined to make the transfer," Gerry said. Subsequent checks in Russian circles revealed that the man in question - Dimitri Rubinstein - had served as the mystic Rasputin's chief financial agent before the Russian Revolution. Rubinstein had been "milking" funds from bankrupt concerns in France. "He was later jailed for selling false Russian passports," Gerry recalled.

Keep calm and carry on
In London, the bank's branch in the City sustained damage in 1940, when a church next door was destroyed by a German bomb. "It was a mess," said Patrick Davison of the City Bank Farmers Trust Company, who visited a day after it was hit. Parts of the church were embedded in desks, typewriters were damaged, and some walls were missing. "But the bulk of the building remains OK and they are carrying on in the most splendidly urbane and unperturbed manner," he wrote in the staff magazine in November 1941. "I saw one of the accountants sitting at his desk ... almost entirely in plain air — clad in mackintosh and bowler hat — dictating a letter to a stenographer in coat and hat — while an umbrella lay handily on top of the desk. ... Really, the people of London are quite amazing."

Women fill gap
As increasing numbers of male staff entered military service, National City Bank started to recruit more women. Women were already working as secretaries, stenographers, typists, and bookkeepers. Mid-1941 saw the hiring of female messengers. After five or six months, female messengers could become junior clerks and study shorthand, typing, banking, and English under the supervision of the personnel department. At the end of 1942, financial incentives were offered for women to study at commercial night schools. The bank teamed up with IBM to offer courses in operating machines to the bank's bookkeeping trainees. By the end of 1942, women accounted for 43 percent of the bank's workforce of almost 10,000, up from 23 percent at the end of 1940. 

Employees face wartime perils
After their branches came under Japanese administration, 12 employees from Hong Kong, China, and Japan were transferred to a Japanese vessel in mid-1942. They sailed to neutral Portuguese waters off the east coast of Africa, where they were transferred to a neutral Swedish vessel in exchange for Japanese internees. Continuing their voyage via Brazil, the bankers reached New York on August 25. In the Philippines, American staff were interned. Among other cases, a member of the Singapore staff escaped by yacht to Sumatra and eventually made it to Australia. Another journeyed by sea to Bombay aboard a French vessel filled with refugees. An employee in Shanghai fled the city on horseback. He eventually made it to Rangoon, where he joined up with ten members of the local branch; they drove to northern Burma and then flew to Calcutta. An Indian employee of the Rangoon branch, K.V. Venkateswaran, ended up walking to Mandalay, and then headed for Manipur in northeast India. He reached his home town in southern India at the end of 1943. "We never heard any news of my father until then," his eldest son, Venkataraman, recalled in 2001. "We were so happy to see him." In 1944, his father resumed working for the bank in Bombay, the only Asian branch to continue operating throughout the war.

Bank goes on a war footing
Citibankers overseas rise to new challenges as the United States enters World War II, and hundreds of head-office staff are called up for military service
When the United States froze Japanese funds in June 1941, National City Bank closed its branches in the Japanese cities of Kobe and Yokohama, and in Dalian, the Chinese port city in Japanese-occupied Manchuria. The Osaka branch having already been closed in April, the only branch left in Japan was in Tokyo, where a skeleton staff was maintained. China's war with Japan had already led to the closures of branches in the Chinese cities of Hankou (part of present-day Wuhan), Harbin, and Guangzhou. Given its role as the official bank for the U.S. government, National City Bank was obliged to remain open in Shanghai, Beijing, and Tianjin, as well as Manila and Singapore. It also stayed open in Hong Kong. By early 1942, following the Japanese attack on Pearl Harbor, the branches in Japan, China, Hong Kong, and the Philippines were under the control of Japanese administrators. After rapidly reducing its assets and liabilities in Singapore, the bank handed over the remaining items on its balance sheet to a British bank on February 5. A similar operation was carried out in Rangoon. Key staff left on February 19. The Calcutta branch closed in April, with key staff, assets, and records moved to Bombay. Back in New York, head-office employees began to feel the impact of war. The bank established an Alert Committee, which, in early 1942, issued emergency instructions to staff at the bank and the trust company. In anticipation of German air-raid alarms, "Put Away Squads" were made responsible for placing all cash, securities, and other valuables safely in designated vaults. The loan and bond departments were moved to the nearby City Bank Farmers Trust Company Building, where all the vaults were several floors below ground level and considered less susceptible to bomb damage. The bank designated 300 first-aid wardens and a "Protective Group" was set up to replace the bank's regular patrolmen in case of an emergency. According to the February issue of the staff magazine, "this entire group of men comprise a unit well trained in marksmanship, crowd psychology and observation of subversive activities." 

Pioneers in a Man's World
In Brazil and Colombia, the success of female employees presages the increasingly important role of women in banking
In December 1942, with World War II in full swing, Gabriela Caumo began working as a typist at the Praça Antonio Prado branch of National City Bank in downtown São Paulo. At the time, the bank had only 150 employees across all of Brazil. Caumo later moved to the payments section, where she learned the bank's accounting system, handling branch-to-branch and bank-to-bank transfers. She then became responsible for safe-deposit boxes before being promoted to the position of account manager. She was still working for the bank in 2006, managing the accounts of 320 clients as a wealth relationship manager. That year, she passed away, at the age of 82. In an interview in 2002, Dona Gabriela, as she was best known, highlighted her long-standing relationships with clients and colleagues. Some of her clients had been with her more than 60 years. "A good rendering of services is the base of our relationship. This is how clients build confidence in our work," she said. During the course of her long career, the operational side of banking had changed almost beyond recognition, and yet she had been able to adjust to the changes. "When I started, all processes and equipment were manual, absolutely nothing was automated. Today, we work with computers and systems. Even so, I keep updating myself because I think this is an important part of my functions." In 2005, Dona Gabriella was paid homage by visiting chief executive officer Charles Prince as the bank's oldest employee anywhere in the world. By joining the bank in 1942, Prince said, Dona Gabriela Caumo "started one of the most brilliant and lasting careers of her generation."

Visual art serves the bank
After World War II, the bank began commissioning art by important U.S. artists (as opposed to designers) for use in advertisements. Among them were notable figures such as Charles Sheeler, Thomas Hart Benton, and Rockwell Kent. Titled "First in Worldwide Banking," and launched in 1946, this was the U.S. financial industry's first nationwide advertising campaign. It emphasized First National City Bank's extensive foreign capabilities and global expertise in key industries. The campaign lasted nearly a dozen years, and the original paintings formed the core of the company's art collection. By the late 1950s, the bank did own some other notable works inherited when it acquired other companies, but there was no collecting for its own sake. Then the advertising message shifted, and the bank began using art to localize itself within the communities it served. From around 1968, then-president Walter Wriston wanted to demonstrate the bank's relationship with the city in which it was founded. He invested in a New York-themed collection that ranged from an 18th-century Ratzer map of the city to grittier contemporary urban paintings by African American masters Romare Bearden and Jacob Lawrence. Wriston's personal favorite was a piece by the young Richard Estes, titled "Sloan's Supermarket," from the artist's first exhibition. During the 1970s, the city was nearing bankruptcy. First National City Bank's senior management took an active role in its turnaround. William Spencer, the bank's president, led community finance initiatives. Franklin Thomas, then CEO of the Bedford-Stuyvesant Restoration Corporation, was asked to join the board. At the time, Bedford-Stuyvesant was one of New York City's most troubled neighborhoods, and his experience helped the bank initiate "Profile of a City," a study of urban problems using the city as its focus. The bank became an active adviser on important city government bailout initiatives. John Reed, Wriston's successor as chairman, saw the potential for art in a different context. He completely restructured the floor where the bank's top leaders had their offices, treating all seniors - including himself - equally with respect to office accommodation. Reed's strategy was to promote an open exchange of ideas among the leadership. The core of the senior executives' "pod" was designed around a Japanese garden, where the team walked and communicated freely. He moved the dining rooms to the same floor, so that contact with clients occurred where the executives worked. The artwork that decorated the floor built on the collection formed by Walter Wriston. It included paintings from the advertising campaigns, with the addition of a number of other paintings and sculptures, as well as archival photographs reflecting the bank's global reach.

Landmarks in transportation finance
Innovative thinking within the bank contributes to a revolution in the shipping industry, and is applied to big projects in other sectors
The Greek shipping magnate Aristotle Onassis grew his shipping business in the 1930s and 1940s on the basis of salvaging shipwrecked or mothballed freighters and cargo ships. He first became a client of National City Bank in 1931. The end of World War II was an opportunity for Onassis. In the United States, the Ships Sales Act of 1946 released a large number of vessels onto the market, including many of those known as Liberty ships. Onassis and his brother-in-law and rival, Stavros Niarchos, went shopping. Onassis came to National City Bank and became the first Greek to acquire ships with U.S. bank financing. As the global economy rebounded in the postwar years, there was more oil to be moved than there were tankers to move it. In 1947, the demand for fuel oil skyrocketed, and Onassis was able to charge a premium for transporting it. Onassis' style was to think big. The standard tanker of the day, the T-2, weighed 16,600 deadweight tons. He could see no reason why a tanker could not be nearly twice that size, so he commissioned a 28,500-ton tanker, one of the first "supertankers," which he christened the Olympic Games, and headed to National City Bank for financing. The ship was too expensive, however, to finance with the usual short-term loan. The Depression and World War II were uppermost in the minds of most of the bank's lending officers, and the idea of changing the way they were used to lending was tantamount to heresy. They suggested that he seek financing from insurance companies, who often made long-term loans. For short-term cash, though, Onassis came to the bank. A young man in the shipping department by the name of Walter Wriston was assigned to work with him. Between them, they pioneered a new kind of financing. The ship's charter, not its market value, became the collateral; the money earned by the charter was paid direct to the bank, which deducted interest and principal, and put the rest in the shipowner's account. For the first time, a lender was able to rely on the cash-generating potential of a piece of property. The new method accelerated clearance of the debt; Onassis owned the Olympic Games outright within seven years, rather than the expected 20. It was the work that Wriston did on this deal that first led management to single him out him as having top-management potential. By the mid-1960s, Onassis was able to launch a generation of very large crude-oil carriers, ships so big that his original supertanker, the Olympic Games, could almost have been carried on their decks as a lifeboat. Although this financing concept was revolutionary for its time, it caught on quickly and was soon being used to underwrite other big-ticket items, including railroad cars, skyscrapers, and aircraft.

A three-stage rocket
National City Bank veteran Ray Kathe, who was in Shanghai during the revolution of 1949, described George Moore as "the fellow who wanted to put pins on the map." His philosophy was that "anytime a door opened, we should walk into a country, because it was so hard to expand." In fact, both Moore and Wriston were responsible for reviving the overseas operation. According to Wriston's biographer Phillip Zweig, Moore and Wriston compared their strategy to a three-stage rocket. The first stage was planting the bank's logo along the major trade routes of the world in every major commercial city and port. The second involved pushing deeper into each country by setting up satellite branches. And the third was to export retail services and know-how from New York. As Zweig noted, this "unscientific, seat-of-the pants strategy" did not involve reams of demographic studies and market analysis. Underlying the plans for overseas was a simple assumption. As Wriston put it, "world trade was going to explode."

New hiring and training practices bring greater diversity
As society evolves in the 1950s and 1960s, so does the profile of the staff
In the 1950s, the personnel manager, Lewis Cuyler, encountered challenges that reflected the profound social changes taking place in the United States and elsewhere during the postwar era. New York State introduced anti-discrimination legislation. It allowed anyone with a grievance to take a complaint to a commission that would make representations to the corporation concerned, with a view to an informal solution. The bank's top management recognized the importance of the new law. Cuyler took his responsibilities seriously. On one occasion there was a shortage of stenographers in his department, and an African-American woman presented herself as a candidate. When her potential co-workers were consulted by their immediate boss about this possible appointment, they expressed reservations. Cuyler decided to talk to them himself, explaining the new law. "The two girls took the day off," Cuyler recalled, "and much to my delight, the day following they came in and told me, really enthusiastically, they would welcome this girl in the department, and would do everything possible to make her happy there." The applicant was offered the job. "She came in, was employed, and it worked out very well." Cuyler viewed the organization's approaches to such issues as very enlightened. "I think they do show the bank's general attitude towards personnel and problems we had, and some of the things we wanted to accomplish." By the 1950s the bank was beginning to employ a growing number of female officers. The recruitment of graduates, already established practice for several decades for men, was being extended to women and African Americans. Even in the mid-1960s, however, women were rarely employed in the bank's service overseas, and were not often seen in the officers' dining room at the bank's new headquarters at 399 Park Avenue. Walter Wriston is credited with fixing the dining problem, although it took longer for the bank to get comfortable with the idea of sending women abroad. The bank was active, however, in bringing local overseas officers to New York, starting in the early 1950s. Among the first was Tatsuo Umezono, later the first Japanese to be put in charge of the branches in Japan. Over the next decade, foreign officers brought to New York for training included a young Chinese-Singaporean banker named Wong Nang Jang, later the first Singaporean to be put in charge of the Singapore operation. When the bank's 11 Cuban branches were nationalized in 1960, many of the 100 local employees who left for the United States were employed in New York (others were hired by the bank in Puerto Rico and Ecuador). As Walter Wriston put it in typically direct terms after his retirement, "We hired brains and we didn't care what color you were. Talent has no borders." For Wriston, hiring outstanding people was the top priority. "All organizational structures are designed to be run by average people," he said. "If this were not so, all organizations would break down because most of us are average. If you have outstanding people, as we do, any organization will run at 150 percent of rate capacity."

Solid support
For decades, the granite columns of 55 Wall Street symbolized the strength of National City Bank, founded on solid banking fundamentals. For much of the 19th and 20th centuries, a style of architecture reminiscent of classical temples was synonymous with good banking practice.

Bank supports Marshall plan
For three years immediately after the end of World War II, National City Bank operations in Europe were confined to two branches in London. It was not until mid-1948 that the bank reopened the Paris branch of the International Banking Corporation, its foreign banking subsidiary. This coincided with the setting-up of the Economic Cooperation Administration by the United States, to run its European Recovery Program for Western Europe. Under this initiative, later known as the Marshall Plan, National City Bank arranged a large number of commercial letters of credit for shipments to countries receiving U.S. government aid. By the time the program came to an end in 1951, the United States had channeled almost $13 billion to Western European countries and Turkey. The main recipients were Britain, France, and the new Federal Republic of Germany, where the bank established a representative office in Frankfurt at the beginning of 1953.

Juniors from a bygone era reach the upper ranks
Educational programs before World War II made it possible for many staff to be promoted beyond their wildest dreams in the postwar period. Those who benefited included young men and women who joined without a university education. Among them were Thomas Wilcox and Marion Schappel. Wilcox joined as a page (messenger) in 1934. He took night courses at New York University and then enrolled at Princeton University under a National City Foundation award, graduating in 1940. By 1954, he was in charge of the bank's domestic branches. He served as executive vice president from 1957 to 1967, and then as the bank's vice chairman until 1971. Three years later, he became chairman and chief executive of another bank. Marion Schappel was 17 when she joined the bank as a typist in 1942. She worked her way up, becoming platform official assistant at the branch on Broadway and 56th Street. She was appointed the bank's first female assistant vice president in 1966, when she went to work for the Grand Central branch. She rose to become a vice president of the bank and, in 1972, advisory chairman of the National Association of Bank Women. As one of her last assignments, she was manager of the branch at 399 Park Avenue.

New corporate clients
One of First National Bank's attractions to National City Bank was its portfolio of blue-ribbon corporate accounts. Even if some of these companies were already clients of National City Bank, the acquisition was seen as an opportunity to cement closer relationships. First National Bank's big corporate customers included U. S. Steel, American Can, American Radiator and National Biscuit Co., as well as the Burlington Northern, Great Northern, and Northern Pacific railroads.

Focus on Middle East and Africa
In the mid-1950s, looking to the future, the bank extends its operations beyond Europe and Asia to new areas of economic promise
With much of Europe in ruins, overseas expansion in the years immediately after the end of World War II was limited largely to opening new branches and buildings in existing franchises on other continents, notably Latin America and Asia. A particular focus was Japan, where the U.S. military occupation was creating new opportunities. In 1955, operations were extended to four new countries - Egypt, Liberia, Lebanon, and Saudi Arabia. The bank's first Middle East branch opened in Cairo in April, followed by a second in Beirut in October, and a third in Jeddah in December. In Liberia, it acquired Bank of Monrovia in September of the same year. In 1958, African operations were expanded to South Africa, where the bank had had a brief presence after World War I. The beginnings of a pan-African network came in 1965 with the acquisition of 40 percent of Banque Internationale pour l'Afrique Occidentale. As well as three branches in France, this organization had five branches each in Ivory Coast and Senegal, four each in Cameroon and Niger, three each in Gabon and Nigeria, two each in Congo, Mauritania, and Upper Volta, and one each in the Central African Republic, Dahomey (now Benin), Mali, and Togo. The Gulf presence expanded to include a Dubai branch in 1964. In 1967, a second branch opened in Saudi Arabia, in Riyadh. In 1969, First National City Corporation, the bank holding company formed in 1968, acquired 35 percent of Iranians' Bank, a local bank with four offices in Iran. An office in Tehran followed in 1974, the same year that First National City Bank opened a Jordan branch. In 1975, a new branch was opened in North Yemen.

A game-changer
Innovative financing allowed Walter Wriston to help trucking magnate Malcom McLean pioneer the integration of transportation on sea and land. When National City Bank was organizing its transportation department, it focused its attention on the top 10 trucking companies in the United States. McLean Trucking, based in Winston-Salem, North Carolina, was one of the largest. McLean, as innovative in trucking as Wriston was in banking, recognized that he was in the transportation business, not just in trucking. He viewed a ship as comparable to a highway - he wanted to install racks so that truck trailers could be anchored on cargo vessels. Others he had approached for backing thought the idea was untenable. National City Bank, however, teamed up with him to finance the project, which involved buying the Waterman Steamship Corporation for some $42 million, financed entirely by the bank. The deal was a game-changer. Foreshadowing leveraged buyouts by decades, it required no out-of-pocket investment by the buyers. Equally startling, Wriston insisted that the underwriters of the preferred-stock offering deviate from customary practice - which had been for investment banks to make only a "best effort" at placing an underwriting - and commit to buying any unsold stock. McLean designed new kinds of trailers to fit onto his new fleet of ships, a design that ultimately led to the invention of the cargo container. McLean's company evolved into Maersk Sea-Land, which, by 2011, was shipping more than a million containers a year. By the early 21st century, some 60 percent of world trade was traveling at some time or another in cargo containers. Those ports that were slow to adapt to the container age gradually declined in importance. 

Bank faces postwar challenge
George Moore seeks a "new look" for the organization, and sees opportunities in a resurgent Europe
In 1948, George Moore was appointed to chair a committee to find a "new look" for the bank. "National City didn't have a game plan, didn't have yardsticks," he recalled many years later. As for the overseas division, "we found the thing such a mess that we concentrated on purely procedural recommendations." Anomalies included different- sized drafts in the Bombay and Calcutta branches. Drafts by the branches in London were markedly different, not only in size but also in wording and general appearance. Back in 1930, the 83 foreign branches of America's biggest international bank accounted for 29 percent of all the bank's lending and 30 percent of total profits. But several branches that were sold or closed either before or during World War II had never reopened, including many in China - and the branches in that country had accounted for almost half the overseas earnings remitted to New York between 1934 and 1938. By 1955, there were only 61 overseas branches, representing just 14 percent of the bank's loans and 16 percent of its profits. By 1956, Moore was convinced that "we were doing an inadequate job everywhere, especially in Europe." The European Coal and Steel Community was already five years old and the Treaty of Rome, basis of the European Economic Community, was only one year away. When France and the Federal Republic of Germany formed the EEC with Italy, the Netherlands, Belgium, and Luxembourg in 1957, America's leading overseas bank had been reduced in Europe to two branches in Britain and two representative offices, in France and Germany. If the bank's general absence from continental Europe was problematic, so too - in Moore's view - was the performance of the corps of overseas bankers, many of whom were nearing the ends of their careers, having joined the bank in the 1920s and 1930s. "American companies were selling to Europe, buying in Europe, producing in Europe in increasing numbers - and being served by European banks," Moore also noted later. "There were immense business opportunities in Europe, and we were doing nothing to grab them. And if we wanted to grab them, we didn't have the hands to do the work."

Expansion plans for bank aboard
Overseas staff conferences become the key to changing attitudes, as George Moore presses for "new offices everywhere"
In 1956, First National City Bank chairman Howard Sheperd summoned national division chief George Moore to his office. Sheperd and president James Stillman Rockefeller were preparing for a board meeting. The chairman told Moore that he, Moore, was to succeed Leo Shaw, the senior vice president who had run the overseas division since 1946. "Leo thinks you will foul up but we don't," he said. "Go ahead and do what you've said has to be done." George Moore had made a study of the overseas division. He recommended "new offices everywhere," especially in Europe, and new strategies for branches in Latin America and Asia. The bank should also start hiring new people. "In brief, my message was, ‘Hey fellas - there's a whole new world out there. The war's over. City Bank hasn't recognized it yet. Fortunately, nobody else has either.'" Moore wanted to move fast. "Every year you delayed could cost you a fortune," he said. "Not everybody recognized that, because you never made much of a profit out of the first year of a new branch - you were lucky if you got back your expenses. But if you were right, you might be making $5 million a year out of that branch in the tenth year. What you were losing if you delayed wasn't the trivial profits of the first year (if any) but a year's worth of that five million." He adopted a new strategy, using the time it took to get approvals and rent space, to let customers elsewhere in the world know that the bank was planning to open a branch in a particular city. Customers would be told of the latest progress, and a big party would be held on opening day. By the time the doors finally opened, "it wasn't uncommon to do 200 transactions of some size the first day." On his first afternoon in the new job, Moore called a meeting of all the senior overseas officers based in New York. He was not overly impressed - many of them were nearing retirement, and there had been relatively little fresh recruitment for some time. New thinking was required. "The problem with the organization of the overseas division was that the branches had too much procedural autonomy and too little freedom to make banking decisions." 

The senior overseas policy conference
George Moore could not help noticing that the men who worked in the foreign branches did not know each other. It was not surprising - they came home to the United States independently once every three years, went back to their home towns on leave, and maybe spent a week at head office. So he decided to recall 25 senior officers from abroad for a three-day conference at the Westchester Country Club. The Senior Overseas Policy Conference, which took place for the first time in 1957, soon become an institution, with a second conference held in 1959, when Moore became president of the bank. A third followed in 1961 and a fourth in 1963.

Hiring outsiders
In addition to hiring new graduates and accelerating promotions of overseas staff, George Moore raided the domestic division and tried headhunting British merchant bankers, albeit with less success. But he did succeed in hiring John Exter, a founding governor of the Sri Lankan central bank, who had become vice president of the Federal Reserve Bank of New York. Exter, in turn, hired International Monetary Fund deputy managing director Al Costanzo, a former advisor to the Greek central bank. Moore later established a rule that any officer in any branch could be assigned away from his home country. "If he accepted the assignment, he became part of the overseas staff, eligible for all perquisites and premiums; if he didn't, he remained on the local payroll."

Timeless lessons from an earlier era
A postwar generation is reminded of conservative standards dating back to tough conditions in the 1930s
First National City Bank, like its predecessor organizations, maintained the trust of its clients by reminding itself continually of fundamental values. In doing so, it benefited from a strong institutional memory. This ran deepest in staff who had enjoyed a long career with the bank and had seen the organization carrying on and prospering despite highs and lows in an ever-changing environment. John Ingraham, for example, joined First National City Bank as a Harvard Business School graduate in 1957. "It was a very strait-laced organization, reflecting both a mix of the Depression-era environment and the post-World War II 1950s period," he recalled half a century later. "Bankers had not forgotten the lessons from the 1930s, when National City got into serious trouble. Initially, we wore hats to and from the office and the old line vice presidents were seen with starched collars, vests and navy-blue suits. It was not just the dress code of an earlier era that I remember but the frequent reference to terms like ‘standards,' ‘character,' and ‘what kind of collateral,'" he said. "The bank had the demeanor of an era that was precise in the kind of risk people would take, which was little." John Heilshorn, another future senior manager who joined First National City Bank at about the same time, said the standards instilled in the generation that grew up in the Depression were irreplaceable. He recalled that his father, who had once enjoyed a middle-class income, had gotten into serious financial trouble during the 1930s, but was "willing to get out with a paint brush and paint other people's houses on the block to keep the breadline going." Moreover, Heilshorn's father would never accept charity, "and believed very strongly in his ability to solve his own problems and a willingness to swallow his pride." Heilshorn said his father's faith and confidence in himself "was the most significant influence on me, far exceeding the impact of any of my supervisors with the possible exception of Walt Wriston." As a result, "I became an individual with a very high set of standards for himself and was able to work at any chore."

Long haul brings people face to face
The distance between head office and overseas branches shrinks, as intercontinental air travel becomes routine
By the early 1960s, the Senior Overseas Policy Conference, first convened by George Moore in 1957, had become an institution. Following the success of the second conference, in 1959, a third was held in 1961, with 32 officers from branches in 21 countries. In addition to discussing problems in various countries and the latest innovations in banking, the officers reappraised the overseas division's policies and objectives for the future. The meeting was followed by an expanded two-day conference at the Plaza Hotel with 400 senior executives of corporate clients interested in international trade in attendance. The attraction for the corporate guests was being able to obtain detailed off-the-record information about overseas markets first-hand. A fourth overseas conference, devoted to "case studies in management techniques," was held in New York in 1963. By now, the bank was also holding regional conferences overseas. In Colombia, for example, a two-week conference was held for 29 middle managers from 14 countries. The bank held a separate conference the same year for accountants from branches in Europe and the Middle East. When New York state laws were amended in 1960 to allow foreign banks to establish branches in the state, America's leading international bank found itself increasingly playing host to foreign bankers and, in some cases, politicians. In 1962 alone, it hosted 75 "guest observers" for periods of up to a year, mainly from correspondent banks in other countries. In addition, the United States Agency for International Development (USAID) sent foreign government and industrial leaders to the bank to get a first-hand look at U.S. banking procedures. By 1964, the number of such guest observers had risen to about 100 a year. The growing popularity of long-distance business travel by air meant that increasing numbers of managers in New York got to see what was going on in the branches abroad. In 1962, four years after the maiden commercial flight of the Boeing 707 from New York to Paris, 42 officers from the overseas division spent a total of 263 weeks traveling abroad. At the same time, there were more opportunities for staff from the branches to visit New York. In 1964 alone, 56 members of the bank's overseas staff visited headquarters for periods ranging from two weeks to 12 months. 

The need for motivation
The three-day conference at the Westchester Country Club for the senior overseas officers in 1957 was unprecedented. Unfortunately, the meeting did not go quite as planned. George Moore recalled, "They spent the whole time talking about the reports New York demanded and what a burden they were, and about their compensation and perquisites...." To be fair, Moore acknowledged, most of their contacts with New York had not been encouraging. "It was all nit-picking..." Moore said he gave them a pep talk, reminding the senior branch officers that they were ambassadors of the United States and guests in the countries where they worked. They should be making people feel glad that they, the bankers, were there, contributing to the country and helping its development.

Global talent for global expansion
First National City Bank turns to the business schools for good people and accelerates the recruitment of local staff in overseas branches
To improve the caliber of the overseas division, First National City Bank revived a prewar training program, striking a deal with Charles Williams, chairman of the banking department at Harvard Business School. The bank had never recruited from Harvard, partly because Williams believed bank salaries were too low, the work too boring, and promotions too slow. According to George Moore, "We told Williams we were going to hire 50 to 100 a year for the overseas division and they'd have fascinating work, good pay and a chance to move ahead fast." The bank started hiring first-year students for summer jobs, and eventually persuaded Williams to disclose the names of some of his best recent graduates. "Once we had Harvard on our side, of course, the other business schools came clamoring." Among the first recruits in 1957 were John Ingraham, a Harvard graduate, and William Rhodes, who had graduated from Brown University in Rhode Island. Ingraham would later earn his reputation for restructuring Penn Central, a railroad company that failed in 1970 in what was, at the time, America's biggest corporate bankruptcy. As for Rhodes, he would come to international prominence a decade later for his leadership in managing the external debt crisis in Latin America (Mexico, Brazil, Argentina, Uruguay, Jamaica, Peru, and Nicaragua) in the 1980s and 1990s, and in Asia (Korea) in 1997-1998. Half a century after they joined up, both Ingraham and Rhodes were still working for the bank. In addition to bright young Americans, First National City Bank needed overseas talent. In 1958, it began accelerating recruitment and training of local staff in overseas branches. In less than three years as head of the overseas division, Moore changed two-thirds of the foreign-branch managers. "We began the long, slow process of opening new branches, which always required the approval of both the overseas government and our own, neither of which was in a hurry," Moore recalled. By 1967, the number of overseas branches had more than tripled, to 228, up from only 71 in 1957. During the same period, the bank extended its global reach from 24 countries and territories to 63.

The message reaches new markets
National City Bank pioneers television advertising and spreads word of its services in Europe and Asia
In the early 1950s, National City Bank was the first major New York bank, and one of the first banks in America, to devote a major share of its advertising budget to television. After talks with National Broadcasting Co. (NBC), it went one step further by sponsoring a new 11 p.m. news program for the New York metropolitan area. The sponsorship was initially budgeted at about $250,000 a year, for one or two nights a week. But the show was such a success, capturing as much as 18 percent of the viewing audience, that the sponsorship was expanded to three nights a week and ultimately five. "We made a concerted effort not to bombard the public on evenings with what we call now hard news," said Granville Carrel, vice president for public relations at the time. "We felt that people would be annoyed and in many cases angered by the insertion of a commercial into programs of disaster and human suffering." The commercials themselves involved newscaster John McCaffrey interviewing branch managers in some New York neighborhoods. "This created tremendous neighborhood pride and we got a lot of flattering mail over the years," Carrel said. To educate people about the growing opportunities in Europe, the bank produced a booklet on the new European Economic Community, forerunner of the European Union, and promoted its Foreign Information Service as a source of news on the regulatory environment abroad. In 1959, it set up a Common Market Counseling Service in Paris to respond to the "intense interest among American businessmen in this new trade area." It commissioned Fortune magazine to produce a movie, The Big Change in World Markets, which the United States Information Agency had translated into 14 languages. In 1960, the bank produced the booklet Europe Today and extended the counseling service to Frankfurt and New York, in addition to Paris. The following year saw the launch of a French-language edition of the bank's monthly economic newsletter, supplementing the existing editions in English, Spanish, and Portuguese. Total circulation soared to more than 325,000. Another booklet, How Citibank's Overseas Division Can Help You Do Business Abroad, was supplemented by reports devoted to specific countries. In the early 1960s, these included India, Liberia, Mexico, Pakistan, the Philippines, and Thailand. As decolonization in the former British empire accelerated, the bank also published a booklet on the changes taking place in Commonwealth countries. Not only was this flow of publications useful to clients but, from a branding perspective, it also helped position the bank for its future development into a global institution.

A memorable luncheon
In the late 1950s, at the height of the Cold War, the Soviet Union's first vice premier Anastas Mikoyan was a frequent visitor to New York. On one occasion, Howard Sheperd, the bank's chairman, hosted a luncheon for Mikoyan and a group of U.S. businessmen. Anti-Soviet protestors picketed the event, which was being held on the 52nd floor of the City Bank Farmers Trust Building. Despite pleas from reporters, Granville Carrel, the bank's vice president for public relations, barred the media and even refused to distribute the menu to them. "Security was absolutely unbelievable. There were Russian security officers under every elevator," Carrel said. "They put Geiger counters in the food." One reporter from the Daily News, however, managed to slip behind the cordon. When Mikoyan's group arrived, "he just wedged his way in between them and got in the elevator and the next thing we knew he was at the luncheon." Carrel, who knew the reporter, approached the head detective, "who took him by the collar and said goodbye." Next day, under the headline "OUR BOY MADE IT," the Daily News criticized Carrel for removing the reporter and without any foundation accused the bank of holding secret negotiations with Mikoyan to settle losses incurred in closing the Russian branches 40 years earlier. Negative publicity ensued over the next few days, with retail customers threatening to close their accounts. Although some people were outraged by the event, the furor "died a natural death as most of those frightening public relations stories do," Carrel said.

Eurodollars for the multinationals
In London, the bank helps develop the market for borrowing and lending dollars outside the United States
Donald Howard was working in London as a First National City Bank trainee in 1958, just as the eurodollar market was starting to develop. A product of Cold War tensions, the eurodollar market was born when the Soviet Union began depositing dollars in Paris rather than New York. The market for accepting and paying interest on dollars outside the United States soon moved across the English Channel to London, and "just took off like a rocket," Howard recalled. "We didn't start the eurodollar market, but once we learned how it was played, we were the biggest in it almost from the beginning." Following the success of negotiable certificates of deposits in the United States, Howard - who later returned to New York - worked with his London colleagues to develop a eurodollar CD market and, ultimately, a eurosterling CD market. "It was a long time, somewhere in the mid-1960s, before we started soliciting sterling business in British companies," he said. "When I first went out and knocked on doors, I was frequently the first banker they had ever seen in their offices." When the United States started making it difficult to send dollars out of the country, a new market sprang up in standby facilities for U.S. companies abroad. Lawrence Heath, who joined the overseas division in 1960, helped to arrange the first such facility in London in 1966. It was for about $35 million and was priced at half a percentage point above the average 90-day eurodollar deposit rate offered by First National City Bank and other U.S. banks in London. "Later LIBOR came along," Heath said, referring to the subsequent emergence of the London Inter-Bank Offered Rate. "We didn't have that before. We created it with the average of the three rates." Heath said.

Financing a Hollywood musical
The motion-picture industry in Hollywood was another California business that attracted financing by First National City Bank. Joseph Shaw, a vice president who worked his way up the New York branch network before joining head office, recalled backing the musical hit "South Pacific," released by 20th Century Fox in 1958. It was, Shaw recalled, "a very involved loan that required tying in many assets of the principals, scriptwriters, songwriters, producers, exhibitors, and also the cash flow on another successful movie ‘Oklahoma.'" The film of "South Pacific" was a huge success and the loan was repaid early.

Syndicated loans
The client for Citi's first syndicated eurodollar loan was for one of the largest oil companies at the time, according to banker Donald Howard. The company was trying to make an acquisition in Italy, but could not take sterling out of Britain due to exchange controls. "They called us on Thursday and said they had to have the money on Monday," Howard said. "They needed $100 million." At their request, Manufacturers Hanover and Irving Trust were included in the deal, with the former taking $30 million and the latter $15 million. First National City Bank took $55 million. "I don't know how long it was after we did the loan that we did the next syndicated loan. But we did a couple of them a year and then it began to pick up. By the mid-1960s though we were doing one or two a week."

The move to midtown Manhattan
Planning for future expansion, the bank moves northwards from the old financial district into a building designed for the modern age
In the late 1950s, many big companies were moving from the traditional home of the financial district to Midtown Manhattan. In 1958, First National City Bank decided to join the exodus. The old home at 55 Wall Street was overcrowded and ill-suited to modern security and office technology, and the bank was planning for future expansion. The bank's president, James Stillman Rockefeller, decided that 399 Park Avenue should become the head office. The new building, which included a retail branch, was designed in the glass-and-steel architectural idiom of the time. A historical echo can be detected in the fact that the plot had originally been owned by John Jacob Astor, an associate of the bank in its very early days. The initial excavations had been undertaken on a speculative basis by a descendant, Vincent Astor, who was facing cash difficulties. The bank was able to take over the site at a reasonable price. In December 1959, 41 stories above Park Avenue, Gary Horn, a construction worker of Native American ancestry, edged his way along a steel girder and drove home the 306,000th steel bolt. The building had been ceremonially "topped out." Stillman Rockefeller pulled a rope to raise an American flag on a pole at ground level, and the whole flagpole assembly was raised 515 feet by a derrick and placed on top of the building. The new premises at 399 Park Avenue were officially opened on March 27, 1961. Full occupancy was planned for the end of May. The office move took place at the end of a business quarter, when volume of work was typically double the norm. The check-processing, domestic books, and account reconcilement functions were moved without interruption to their work - some 1,300,000 checks went through the system over the Easter weekend. The building and its facilities represented a new age. Staff dining facilities set new standards. By comparison with 55 Wall Street, the telephone system, with a design capacity of 5,000 extensions, was highly sophisticated, allowing direct calls to be made from outside to staff members for the first time. First National City Bank was a subscriber to a forerunner of the fax system, although in the early days, documents had to be wrapped around a cylinder prior to scanning and transmission. One relic of the past remained, at least for a time - the building was fitted with an updated version of the pneumatic tube system for carrying messages. The new building did have one disadvantage in the early days. The decision to move back-office operations to Park Avenue slowed down the clearing of checks, which had to be transported physically to the New York Clearing House back on Wall Street. A solution was found in moving these processes to a dedicated new building at 111 Wall Street in 1968. Today, more than 50 years on, 399 Park Avenue is still the Citigroup head office. 

Walter Wriston joins the team
A "clearly brilliant" man rises to the top as part of a well-balanced trio, helping lay the foundations for Citi's global presence
Although George Moore was in a hurry to open more foreign branches in the 1950s, he knew he had to revitalize the overseas division first. He quickly brought in Walter Wriston, vice president in charge of the European district, as his deputy. The son of the president of Brown University, Wriston was among the American soldiers who liberated the Philippines at the end of World War II and had come into banking after a brief stint at the State Department. When Moore first found Wriston toiling away in the comptroller's department, he found him to be a "clearly brilliant man" destined for things greater than counting assets in branches. When Moore assumed the presidency of the bank in 1959, Wriston succeeded him as head of the overseas division. When Moore was crowned chairman eight years later, Wriston duly became president. And when Moore retired in 1970, he passed the baton to Wriston, who would hold the post of chairman for another 14 years. The contributions of Moore and Wriston were complementary. As Moore wrote after his retirement, "Whereas in 1956 no one wanted to go to the Overseas Division - by the early 1960s the institution began to realize that it offered as good a road as any to the top of the bank." Together, Moore and Wriston laid the foundations for the global presence of Citibank today. While Moore and Wriston both drove overseas expansion in their different ways, the man who made the big decisions as chairman between 1959 and 1967 was James Stillman Rockefeller. Stillman Rockefeller was the grandson of William Rockefeller, who co-founded Standard Oil with his brother in 1870. His mother was the daughter of James Stillman, the National City Bank president and chairman in the late 19th and early 20th centuries. As Fortune noted half a century later, James Stillman was "one of the few acknowledged geniuses" in America's banking history.

Treasury on a global scale
As part of its overseas expansion during the 1960s, First National City Bank develops new services crucial to maintaining the liquidity of multinational clients
Treasury operations ensure that banks have local currency that they can provide to customers through domestic money markets. This allows them to take excess deposits from other banks and put them to work. Don Howard was the bank's vice president running operations in Britain when the eurodollar market exploded in London in the 1960s. "I did the transactions both on the deposit and the lending side, which were booked in London but actually negotiated in the U.S., or at least not in London," he recalled. "Effectively, I was running a treasury operation in London independent of London." In 1972, Howard became senior vice president of finance in charge of global treasury and money-market operations. The bank was expanding rapidly overseas, and developing the short-term money-market business was one of the first things it did when going into a country. "We would put in a group headed by an experienced treasurer, and develop a money-market operation which then became a foreign-exchange operation. That then became the essence of a whole treasury operation in the country," he said. The bank would identify U.S. clients who were doing business in a particular country and then approach the local people. In the absence of a large deposit base, this helped fund the bank's local activities as well as the loan book. Big client names included General Motors and Caterpillar, as well as mining and oil companies. Treasury operations were integral to the success of the bank's World Corporation Group. To serving big multinationals, the development of domestic money-market operations was crucial. In Europe, the key markets were London and Paris, followed by Brussels, Amsterdam, Milan, and Frankfurt. At the time, Citibank was the only U.S. bank with operations in every country in the European Economic Community. It was also very strong in Latin America, particularly Brazil. Global treasury operations benefited from a particularly talented group of foreign-exchange traders. Citibank's foreign-exchange operations worldwide were based on five Germans hired in the 1960s, who went on to senior positions in the United States, Switzerland, Germany, and Asia. Prominent among them were Heinz Riehl and Ernst Brutsche. Riehl set up a regional treasury training course in Manila, which was later extended to other locations and corporate clients. Among those trained by him was John Thom, an Australian who built up the treasury operation in Asia.

Negotiable certificates of deposit
Riding the "wave of the future," First National City Bank becomes the leading bank in the New York metropolitan area, and top bank overseas
By 1965, Fortune magazine was describing First National City Bank as the "wave of the future" for American banking. It had surpassed its rivals in terms of local branch network; with 150 branches, it was the leading bank in the New York metropolitan area. In terms of assets, it was now America's second-largest bank after Bank of America. It was the top bank overseas, with 163 branches and affiliates in 55 countries. What was more, earnings had kept on growing too. What was the explanation for such a breathtaking growth performance? The magazine noted that the bank had been well placed to expand its domestic retail business with higher-yielding products such as consumer mortgages and personal installment loans. It had pioneered consumer loans as early as 1928 and had been the most aggressive in nourishing the new postwar mass market, helping to develop markets for both car and student loans. First National City Bank was also the only major New York commercial bank with a national charter. Applications to open new branches were processed by the comptroller of the currency at the Federal Treasury Department, who was eager to grant rapid approvals. Banks with state charters had to be approved by the New York State Banking Department and by either the Federal Reserve or the Federal Deposit Insurance Corp. While it had also moved into long-term corporate lending, aircraft leasing, and factoring, First National City Bank's biggest coup was to pioneer the negotiable certificate of deposit (CD) in 1961. Walter Wriston and John Exter, the former Federal Reserve official, noticed that European banks had been issuing such instruments with maturities of three to five years, but they were non-marketable and non-negotiable. Wriston and Exter realized that a marketable time deposit that paid interest would be attractive to corporate investors. And so, by adapting the European idea, the bank found a way to reverse the steady outflow of funds from corporate checking accounts that had begun in the late 1950s. In effect, it was now offering to pay interest to get back funds it was previously getting interest-free. As Fortune noted, "the new instrument took the banking community by storm," with the value of outstanding negotiable CD issues reaching $15 billion by 1965. For First National City Bank, negotiable CDs were now the biggest source of funds after savings deposits.

Financial center
In the 1950s and 1960s, Wall Street was still the hub for financial services in New York. However, in one sense, this was the end of an era, as First National City Bank was planning to move its head office to Midtown Manhattan. The branch at 55 Wall Street operated until the 1980s. Citi still has offices nearby, at 111 Wall Street.

The first female branch manager in Colombia
In 1965, Cecilia Bonnet joined First National City Bank in Bogota as a back-office assistant, with responsibility for client information and credit-history reports. She later worked as a platform officer, coming into direct contact with customers and discovering an innate talent for communicating effectively with people and identifying their needs. When the bank decided to open three mini-branches in Bogota in 1968, Bonnet was named manager of the Chicó branch, one of the biggest. At the age of 20, she was not only the first female branch manager in Colombia, but also among the youngest anywhere. Bonnet was subsequently featured in an advertising campaign; she was also the subject of an article in the leading newspaper El Tiempo. At the time, banking in Colombia was an almost exclusively male domain, associated in the public mind with middle-aged men. At First National City Bank, it was assumed that "gringo" managers would be in charge. Bonnet's appointment had such an impact that another bank across the road changed its manager within two weeks of her arrival. Bonnet stayed with the bank for another three decades, retiring in 1997.

Cards revolutionize banking
Growth is delivered by the credit-card business, offering an alternative to the traditional "bricks-and-mortar" banking model
According to John Reed, the origins of the credit-card business lay in the need to make a line of credit available to consumers efficiently. Citi already had a personal-loan department, but the overheads were high with consequently high interest charges. Unlike in Britain, overdraft banking was not allowed in the United States. Hence, the invention of the Everything Card in the early 1960s. The Everything Card was accepted only in New York. At the time, a national card was still unknown. When John Reed was running the consumer business in the 1970s, his colleague Dave Phillips pointed out that, since the card relationship was already based on contacts by phone and mail, there was no reason why it should not be extended outside the area where the bank had branches. Reed explained, "So we decided to start a direct mail campaign around the country to get customers. By then credit bureaus had come into being, as well as credit scoring, and so we had the ability to get a credit check on people prior to mailing them a card. Within a year and a half we were the biggest direct mail people in the country." The rest of the banking industry protested vigorously. "They said it's not fair to poach customers from out of your geography," Reed recalled. "I spent about a year pacifying bankers whose customers we had taken, but we developed a nationwide card business." To address the challenges of granting credit, Citibank drew on the expertise of companies such as Ford Motor Credit, GMAC, and General Foods. For instance, Richard Braddock, a former brand manager at General Foods, was recruited in 1973. He went on to become Citicorp's president and chief operating officer. A blend of techniques - credit scoring supplemented by effective marketing - took Citi into the intensive use of branding and advertising, in a style not traditionally associated with the banking industry. In the words of Steven Freiberg, who was later head of the global credit-card business, "Now, more than 30 years on, it doesn't sound extraordinary. But back in those days the reaction was, ‘You did what?!' " By 1994, Citibank had become the world's largest issuer of bank and charge cards with almost 50 million cards active - 34 million in the United States, nine million in other countries, and almost seven million Diners Club cards. Citibank was also issuing five million private-label cards for department stores and other retail outlets. In North America and Europe, the company consolidated the card businesses under a single team, which ran 15 processing and customer-service facilities. It was the second-largest card issuer in Belgium and Greece. In Asia, cards were Citibank's fastest-growing business, with three million cards in force, making it the largest issuer in the region. In addition to being dominant in almost every Asian market where it operated, the bank was also the exclusive credit-card partner for the region's biggest frequent-flyer program, encompassing seven airlines. The number of cards was also growing in Latin America, where Citibank was approaching the top market share position in several markets.

Opportunities for women
The first woman employed by National City Bank was Kate Braden, who was working as James Stillman's secretary by 1902, when most secretaries were men. In 1905, the bank had just two female tellers. World War I was a turning point; during the war, the number of female employees jumped from 156 to over 600, and former financial librarian Florence Spencer became the bank's supervisor of women. In 1925, Nathalie Laimbeer became the first female bank officer, and in 1941, the first female page (messenger) was hired. World War II, like the previous world war, gave a boost to female recruitment, as large numbers of male employees joined the military. Recent decades have seen many more women in senior positions. For example, in 1968, Ann Gabriel became the first female branch manager, and in 1985, Gladys Coupet was appointed country officer in Haiti, the first female country officer in the bank. By the end of the 20th century, more than half of Citibank's employees in the United States were women, who represented some 39 percent of the bank's officers and managers.

Reed confronts back-office challenge
New skills are in demand as the battle against paper is fought with new vigor, and the hunt is on for processing efficiencies
In the 1960s, following business growth and several bank mergers, the volume of transactions threatened to overwhelm back-office operations across the industry. Future bank president William Spencer was put in charge of First National City Bank's operations in 1967. He made the inspired decision to bring in a young man from the International Group, John Reed, with instructions to tackle the problem. In 1970, Reed was made head of the Operating Group. Reed took an "industrial" approach to processing the mountains of paper that flowed through the bank's back office. Each day, the bank was processing two million checks and handling financial transactions representing billions of dollars. Reed calculated that New York banks probably spent $800 million on back-office processing in 1970, with staff costs eating up about two-thirds of that expenditure. First National City Bank employed almost 8,000 people, nearly half its domestic staff, in the Operating Group alone. According to Reed, the processing business was "in many ways more characteristic of industry than of finance." It was not only large, technologically demanding, and labor-intensive, but also expensive. In 1970, he noted that the operating costs of processing had grown "significantly faster" than bank earnings, with gains in productivity showing no signs of keeping pace with wage increases. Reed focused on developing skills that made terms such as "error rate" and "cost per transaction" the working language of the Operating Group. He emphasized the need to deal immediately with problems raised by customers, and set new turnaround standards for fund transfers and investigations. Perhaps most importantly, Reed tried to make the unglamorous back office a desirable place to work, by offering unusual challenges, responsibilities, and opportunities to bright young men and women. The main priority was to control costs by making basic systems cheaper to run. At the beginning of the 1970s, the paperless transfer was still a distant goal, more than five years away at least. As Reed said at the time, "It is a question not only of technical problems, but also of developing and managing a new set of skills, technical and managerial, that are necessary for the logical evolution of the processing business." Crucially for the bank, it became clear that moving money and other financial data for clients could become a profitable business in itself. This was the thinking that lay behind the rise of the Global Transaction Services business.

The Matrix
Before the 1970s, the bank was organized geographically, with country officers responsible for all activities in their domain. As communications became faster and the product mix more complex, it became necessary to focus on customer needs and deal with them across geographies and product lines. An officer overseas handling a customer group in a given location would be line-managed from New York, as well as answering to the local corporate head. This pattern of reporting relationships came to be known as "matrix management." John Reed compared the challenges to those faced by the military. "When you go to war, you have air force, army, navy, marines, and they all want to do their own thing. You have to bring control. We learned to live with that," he said. "I believe customer focus is right. If you can orient yourself to satisfying customer needs, you'll run a good business." The establishment of the World Corporation Group was an early example of matrix management at Citi. Although structures have been modified since, the same principles underlie the bank's operations today.

Fresh faces come to the board
In the 1970s, the board of directors becomes more representative in terms of race and gender
When Walter Wriston became president of the bank in 1967 and chairman in 1970, the composition of the board was not exceptional for the time, in that it consisted largely of white American men. Most were captains of industry and other prominent business leaders. The only non-U.S. citizen was Lord Aldington, chairman of the British bank Grindlays, with which First National City Bank had recently forged a partnership. He became a director in 1969. Every chairman had in those days the opportunity to gradually renew the composition of the board as existing members retired, and Walter Wriston made full use of it. The 1970s were a decade of massive social and economic change, and gradually the board came to reflect Wriston's vision of the modern world. As John Reed put it, "He always liked to have on the board people whose opinion he respected, and with whom he liked to talk, not only with regard to Citibank things but more broadly." In 1970, for example, the academic world was represented on the board through the appointment of Dr. Laurence Fouraker, dean of Harvard Business School. The decade also saw women directors in the boardroom. This was not mere tokenism - it was widely accepted that Wriston judged people purely on their merits and what they would contribute as board members. According to Reed, one factor in opening Wriston's eyes to the potential of women in senior positions was the influence of his wife Kathy, herself a successful lawyer. In 1973 Citi appointed its first woman director, Eleanor Sheldon, a sociologist and president of the Social Science Research Council. Toward the end of the decade a second woman director was appointed - Juanita Kreps, a labor economist who went on to serve as U.S. Secretary of Commerce from 1977 to 1979, the first woman in that position. Wriston was blind not only to gender, but to color also. Among the first new members to be appointed during his tenure was 36-year-old African-American lawyer Franklin Thomas - despite the fact that Thomas had been close to the Democratic politician Robert Kennedy, with whose political stance Wriston was not in sympathy. Thomas was a former U.S. Attorney for the Southern District of New York and deputy police commissioner in New York City. At the time of his appointment he was running a non-profit community-development corporation. Thomas went on later to head the Ford Foundation. He would still be on the board in 2008, when he was a consultant for a non-profit institution in South Africa, a country Citicorp had left in 1987 to return seven years later upon the collapse of the apartheid regime. Thomas' knowledge of South African affairs helped form the bank's views as to what the private sector attitude to apartheid should be. Another notable appointee was Brazilian financial technocrat Mario Simonsen, who joined the board in 1980 when he was vice chairman of the Brazilian Institute of Economics. A finance minister of Brazil in the 1970s, Simonsen was credited with recognizing earlier than many other observers the need for Brazil to adopt policies to fight the inflation that afflicted the country during the crises of the 1980s. He remained a director until the mid-1990s. The spirit of openness that characterized these appointments was reflected at the same time in management appointments.

Learning from the auto industry
To carry out his plans as head of the Operating Group, John Reed - an engineer by training - turned not to the banking industry, but to the car industry. He recruited several people from the Ford Motor Co., which had a strong analytical culture. "The automobile business in those days understood profit," Reed recalled later. "We simply reconceptualized everything and then reorganized around a different conception, brought different tools to work and were able to get rid of our backlogs and improve our quality. We started measuring errors and we started finding the cause of errors. We brought some discipline to the back office and were successful - not only in improving performance but also in significantly reducing cost. It was a conceptual revolution, nothing else."

Internationalizing senior management
Reed follows Wriston's lead in fostering meritocracy throughout the organization, bringing opportunities to talented people from outside the United States
In 1970, as chairman of Citicorp, Walter Wriston, by nominating Lord Aldington and Franklin Thomas, began the process of creating a more diverse Citicorp board of directors. Shareholders recognized the value of diversity and elected the nominees. Succeeding Wriston as chairman, John Reed acknowledged the advantage that diversity - whether in terms of gender, race, or any other factor - brings to a global organization. He appointed individuals with a wide variety of backgrounds to senior positions in Citicorp. He was following a principle that, over recent decades, has served the bank well: putting talented people in senior jobs without regard to their country of origin. Among his early appointees was vice chairman Hans Angermueller, a Czechoslovakian-born German-American. Increasingly, senior management ranks contained individuals of many different ethnic backgrounds. For example, by 1985, Reed had appointed to the top management team two Asians who were to make notable contributions to the organization's long-term success. The more senior was Pei-yuan Chia, a 47-yearold Taiwanese, who was group executive in charge of the U.S. Card Products Group at the Individual Bank. Chia had joined the company from General Foods Corp. in 1974. As part of a drive to bring in marketing expertise from outside the bank when Citibank was placing new emphasis on consumer banking, Chia was put in charge of marketing and the ATM program in New York, before becoming managing director of the company's Belgian subsidiary. At the same time, Victor Menezes, a 36-year-old Indian, was appointed senior corporate officer for Latin America and Africa. Menezes had run the Indian operation for five years before becoming country corporate officer in Hong Kong in 1983. He later rose to become chairman of Citibank and was senior vice chairman of Citigroup when he retired in 2005. The principle of diversity was more entrenched by the time, in 2008, the bank had a Anglo-German chairman, Sir Winfried Bischoff, and a chief executive officer, Vikram Pandit, who was the first Indian appointee to that role in any major U.S bank.

Multinational customer focus for new World Corporation Group
The bank reorganizes itself around the global activities of its biggest clients
In 1973, Walter Wriston's successor as bank president, William Spencer, announced the establishment of a new division: the World Corporation Group, designed to cater to large multinational companies, an increasingly important segment of the corporate market. It was to operate globally, in key trade centers, with its own staff. If the new multinational division, spanning 22 countries and headed by executive vice president Tom Theobald, was going to succeed, it was crucial for all overseas employees to understand how it was going to function in conjunction with a newly formed International Banking Group, headed by Theobald's counterpart, George Vojta. Both reported to vice chairman Al Costanzo. In late 1973, Theobald and Vojta embarked on a series of joint briefing trips abroad. The new structure formally came into being the following year. The intention behind the new structure was to make some officers responsible for local companies only - they would report to Vojta. Relationships with multinational companies would be handled by officers reporting to Theobald. "We took an awful lot of time and counsel," Vojta recalled. "We made a number of mistakes, obviously. But we basically felt that by the end of 1974 we had the thing pretty well established." According to James Collins, who ran the franchises in South Korea, India, and Indonesia in the 1970s, the creation of the World Corporation Group had a general impact on the way business was done. "It helped spread the bank's franchise to the local corporate groups," he said. "People [in the bank] understood that you had to listen to what the customer wants. The whole marketing attitude changed. Maybe because of competition, the bank got more in the way of going out and seeing customers, bringing new business in, bringing new products on line: it was quite a change. The bank became considerably more proactive."

Relationships with Japanese clients
One factor in the success of the World Corporation Group was an innovation that originated in Japan. Forging relationships with Japanese customers through Citibank's network within the country was challenging, as many companies within industrial conglomerates had established links with banks associated with the same groups. A new strategy was adopted. Citibank established a network of Japanese marketing officers in countries outside Japan where Japanese multinationals were expanding. The network grew to encompass Hong Kong, Indonesia, the Philippines, and Singapore, as well as London and Düsseldorf (where most Japanese companies in Germany were based). In due course, officers were also positioned in Latin America - notably Brazil, which, besides attracting Japanese companies, also had a significant population of ethnic Japanese. According to George Vojta, the approach was, in principle, just like following U.S. customers across the globe from New York - with an added bonus. "As we followed them overseas with our branch network and began to service them abroad, we used that leverage ourselves in Japan to get direct relationships with the corporate customers in Japan and to get a portion of their local currency business," he

In late 1974, Citicorp pioneered the use of cards at its 230 branches in New York. Known as Citicards, they enabled customers to cash personal checks up to the full amount of their balances. They could swipe a card in a terminal and receive authorization in 10 seconds. Following a one-year trial, the system was extended in late 1975 to give customers with checking accounts the four most frequently sought pieces of information, including the account balance at 8:00 a.m., and the date the customer's last check had cleared the account. The cards could also be used to show how much credit was available to the customer through the bank's overdraft system and how much was owed, including interest. With 2,800 terminals in the bank's branches and another 2,000 in retail outlets around New York, the system was believed to be one of the largest networks of computer terminals in the United States at the time.

Bank recruits top talent abroad
Breaking with tradition, the bank broadens its hiring practices to include experienced bankers of many nationalities
Building a solid corps of international staff involves the recognition that attitudes to working overseas vary from culture to culture. Richard Huber was the 37-year-old head of Bank of Boston in Brazil when he was hired by Citibank in 1973 to manage its São Paulo branch. "It was one of the first times that the bank had hired anybody from outside, because the culture of the bank had been to hire recent graduates and develop them from within. This was Walter Wriston's philosophy - we grow our own, we don't go outside and recruit," Huber recalled. Huber had been working in Brazil for six years before joining Citibank. "It was in Brazil that I first started believing in the importance of recruiting top, top, top people," he said. In addition to Brazilians, Huber hired people from other countries, including Chile and Portugal. This was a time when in 1974 a coup in Portugal led to rapid decolonization, and an exodus of Portuguese from newly independent former colonies. "When the Portuguese revolution occurred, I almost literally went out onto the beach in Rio and looked for Portuguese bankers. There were a lot of young Portuguese who had bailed out and we hired about ten. They were well-educated and well-trained." When Huber was transferred to Tokyo in 1977, he found that few talented young Japanese wanted to work for a foreign bank. "So it was clear to me that the critical path, even beyond strategy, was to set about revitalizing the organization by making recruiting and training the highest priority." The success of the recruiting programs did have one arguably negative consequence. As the bank came to rely less heavily on an exclusive cadre of international bankers, people became less mobile. "You lost something of the ‘foreign legion' element - the guy who runs Paraguay who then goes to Italy and then to Dubai," Huber said. "Guidebooks or manuals are nowhere near as effective in transferring experience as movements of people." Huber remained Citibank's country head in Japan until 1980. Later, he became the senior executive in charge of Northeast Asia and ultimately all of Asia. Throughout this period, recruiting talented young people remained a top goal. "In Japan, we finally were able to break through but it wasn't easy," Huber said. "In the rest of Asia, it was the same problem - how do you bring in talented young people? We developed an elaborate and ultimately successful program premised on recruiting nationals of various countries at American business schools." Efforts to recruit the best available people wherever Citi operated paid dividends, as the multinational ranks of senior managers and distinguished alumni testify.

The right kind of ATM
The ATM design ultimately adopted was based on extensive consumer research. According to Pam Flaherty, manager of the Wall Street branch when it was introduced, "As it was originally designed, you did a bunch of things with the machine before you dipped your card. What they observed with cameras and whatever was that, no matter what instructions you gave people, they had this card and they were going to dip it in that machine right away. So they changed the design of the machine so that the first thing you did was dip the card. And then they discovered that women had purses and things, so they provided a ledge to put them on."

Oil crisis brings new opportunities
Recycled petrodollars fund new projects, with benefits to the bank's overseas business, particularly in South America
In 1975, the United States and much of the rest of the world were suffering their worst recession in four decades, following the quadrupling of oil prices over the previous two years. Members of the Organization of Petroleum Exporting Countries (OPEC), on the other hand, were sitting on cash surpluses of some $54 billion. As the United States was rocked by President Richard Nixon's resignation in 1974 and by the evacuation of Americans from Vietnam following effective military defeat, a national malaise led, in time, to calls for restrictions on foreign investment. A popular scare was that the oil-exporting countries were now so rich that they would be able to buy up every company listed on the New York Stock Exchange within five years. For the bank's vice chairman, Al Costanzo, this was "an absurdity too frequently voiced by responsible people." As it turned out, many of the petrodollars (dollars received as payment for oil) ended up as deposits in the international market for dollars in London and were re-lent to developing countries. For Citibank, one of the first lending opportunities in this context came in South Korea, an oil-importing country that began suffering severe balance-of-payments difficulties towards the end of 1974. The bank arranged a $200-million syndicated loan. The agreement included a provision that the Koreans would incur no penalties for repaying the loan early. Citibank did not expect repayment for seven or eight years. The widely held view was that Korea was at risk of failure. In fact, the Korean loan was repaid in 1977. Overall, Citibank's overseas business was highly profitable in the years following the oil crisis of the 1970s. In 1977, South America was the biggest single contributor to profits, generating more than $100 million in net operating earnings - more than the United States and Asia Pacific combined. In Brazil alone, former São Paulo branch manager Richard Huber recalled, the country's earnings exceeded $70 million in 1977, up from $5 million four years earlier. One of the major initiatives of that decade was Citibank's large-scale entry into retail banking. "John Reed always claimed that the profits from Brazil paid for the development of the consumer bank," Huber said.

Understanding credit
Henry Mueller joined National City Bank at 17 as a page, when the Great Depression was at its most severe. He rose through the ranks to become one of the bank's wisest counsellors in the field of risk and credit. In 1974, he became chairman of the Credit Policy Committee. He was responsible for establishing credit policies and rules, as well as supervising the soundness of the bank's loans portfolio. Mueller's understanding of lending principles was crystallized in a small book, Credit Doctrine for Lending Officers, first published in 1976. He observed that "credit officers need a sense of caution when everyone is enjoying the party, when bullishness is widespread. But they also need the courage and wisdom to take reasonable lending opportunities when the bank-credit market is gun-shy." In a preface to an edition published in the 1990s, the then Credit Policy Committee chairman Michael Horgen warned that when memories are short, errors are liable to be repeated. He advised staff to heed lessons of the past, to "profit from the experiences of others without having to live through them. Please take time to read and remember."

Focus shifts to retail banking
The business is transformed as consumer banking becomes a priority, and the ATM delivers 24-hour service
In 1974, John Reed became head of the new Consumer Services Group. Believing that consumer banking would become a core business, he outlined a long-term vision. "We are creating something new," he wrote in 1976. "I refer to a fundamentally new business starting with a dedication to the consumer, and to the proposition that we can offer a set of services that will substantially satisfy a family's financial needs under terms and conditions that will earn the shareholders an adequate profit while creating a healthy, positive and straightforward relationship with the customer." Written on vacation, this document became known in Citicorp annals as the "Memo from the Beach." "Working in the consumer bank in the early years was like a political campaign internally, particular at the beginning," recalled Pam Flaherty, who, in 1973, as assistant to international banking chief George Vojta, had accompanied Reed on a six-month trip identifying promising consumer markets abroad. "It was a real sense of mission, a sense of ... creating a new kind of business that was really going to benefit the customer." Another strand in Reed's thinking proved very important in later decades: "One of the key thought processes around the consumer bank was called success transfer. The idea was that we would identify ideas and products in one business in one geography and transmit them to another. The most ubiquitous was the automatic teller machine, or ATM." "At the time, there were no customer-friendly ATMs available and only limited capability of developing the fully trustworthy online interactive computer system which was necessary to run them," Reed said. Citicorp tried unsuccessfully to procure supplies. "So we built our own hardware, wrote our own software and introduced the system. Our first was to introduce a complete system for the City of New York." The ATM was launched at a branch in Queens in 1977. By the end of that year, all the bank's New York branches would have at least two machines operating 24 hours a day, seven days a week. "From the beginning, John Reed insisted that there would be two ATMs in every place," Pam Flaherty said. "People thought this was ridiculous as it vastly increased the costs. His view was that machines are not infallible and our promise is 24 hours a day." This commitment was the origin of the slogan "Citi never sleeps," which dates back to that era.

Ethical approach brings solution
When the structural engineer responsible for Citicorp's new headquarters proposes urgent modifications, the bank responds positively
The former Citicorp Center, completed in 1977, is one of the most distinctive features of the New York skyline, and one of the most robustly built. Behind this strength is a story of sound ethics and cooperation between professionals. A year or so after the building was finished, and after it was fully occupied, a New Jersey engineering student did some calculations on the effects of "quartering winds" - winds striking it on the diagonal - given the unconventional positioning of the tower's "feet," which are midway along the sides, rather than at the corners. The results were worrying. The project's structural consultant William J. LeMessurier, initially incredulous, uncovered a problem. It lay in the method by which the building's internal wind braces had been joined, following some decisions taken during the construction phase. Although there was no suggestion of failure to observe building regulations, LeMessurier decided silence was not an option, and Walter Wriston and John Reed were brought into the picture. The hurricane season was approaching fast. There was an urgent need for action. So, without disrupting the lives of the office workers, two-inch-thick steel plates were welded over more than 200 bolted joints. Each day from 5 p.m. to 8 p.m., plywood enclosures were built around the places where, from 8 p.m. to 4 a.m., an army of welders would get to work. Flying into LaGuardia Airport one Sunday night, LeMessurier could see the Citicorp Center lit up by sparks. "The welders were working up and down the building, fixing the joints," the New Yorker reported him as saying. "It was an absolutely marvelous thing to see." The construction professionals had accepted their social responsibilities. The bank had cooperated in finding a solution, accepting an offer of compensation without, as the New Yorker magazine put it, the "punitive impulse that often poisons such negotiations." Everyone involved emerged with enhanced reputations.

Financing municipal America
As it has done throughout its history, Citi plays an important role in developing infrastructure across the United States
The development of the United States has been driven, in part, by investment in municipal infrastructure, from canals to highways to bridges to airports. Throughout its history, Citi has counted municipal clients among its most important, a heritage that stretches back to several of its predecessor companies, including not only City Bank of New York, but also Smith Barney and Salomon Brothers. Until the late 1970s, airlines operating in the United States needed Federal Aviation Administration approval to establish routes. After deregulation in 1978, the airlines underwent a period of route expansion, which created a demand for the financing of airport construction. The "muni" department took a leadership position in arranging capital financings for facilities at some of the United States' largest airports, including those in New York, Los Angeles, San Francisco, Boston, Philadelphia, Chicago, and many more. Las Vegas, geographically isolated by desert from surrounding areas and located over 2,000 miles from the east coast of the United States, had long been the only destination where gambling in casinos was permitted. But by 1978, gambling in the United States had become more broadly legalized, and Atlantic City was attracting East Coast customers. Following deregulation, Clark County, Nevada, began developing a plan to expand the Las Vegas McCarran International Airport, which was vital to securing the community's future. In order to fund a new terminal, runway enhancements, and other projects, the county chose Citi's muni department, then part of Smith Barney Harris Upham, as their banker because of its credentials, experience, and innovative financing solutions in the aviation sector. As the financing program began in the late 1970s, the airlines and airport were involved in negotiations over the proposed expansion. The muni department, having a history of service to both sides, brokered an agreement. McCarran Airport has become financially one of the strongest in the United States. The county understood that the success of the bond offering would depend on the placement capability of the municipal finance group they chose. At the time, Las Vegas was considered a community in transition. It needed a firm with the credibility to project the community's vision and the viability of the local economy. The quality of the muni group's platform resulted in a successful offering. The department has either senior-managed or been coordinating banker on every financing since the relationship began.

Citi comes to aid of fire department
In 1980, Citibank made its operations department building in New York available for a full-dress fire drill designed to allow 10 city fire companies to gain experience in high-rise situations. The bank's fire safety team mobilized according to its emergency plan. The firefighters were confronted with representations of real hazards, such as collapsing ceilings, shorted wiring, and bad visibility. A volunteer Citibanker played the role of a victim overcome by smoke.

Networking a continent for a client
The Nigerian Bottling Co., a subsidiary of Coca-Cola Hellenic Bottling Co., is the leading soft-drinks manufacturer in Nigeria, with 13 bottling facilities and more than 59 distribution warehouses. In order for the company to receive immediate credit from its distributors and view their payments in real time, GTS provided mobile point-of-sale terminals for large distributors, and a correspondent banking network for use by smaller distributors. Book transfers between the correspondent banks and Citi ensured same-day settlement.

Two Salomon alumni
Like Citi itself, Salomon Brothers built a reputation for bringing on talent. Several former Salomon employees have become eminent in other spheres, including public service. 
William Simon, senior partner in charge of the government and municipal-bond departments at Salomon, later became Secretary of the Treasury under presidents Richard Nixon and Gerald Ford. He served on the board of Citicorp from 1977 to 1983. 
James Wolfensohn, the senior Salomon Brothers executive committee member associated with the successful 1981 Chrysler Corporation rescue plan, went on to become president of the World Bank from 1995 to 2005, and in 2006 became a senior adviser for Citi.

GTS connects government with their clients
Citi works with governments to ensure social benefits reach their citizens on time every month, no matter where they live around the world. An expatriate Italian pensioner now living with his daughter in São Paulo, Brazil, is able to have his pension deposited in his local bank in the local currency. Complex payment channels are equally well supported. An Indian citizen employed in Dubai is paid using a personalized prepaid card that allows him access to core banking services via Citibank ATMs, giving his family in Delhi access to the funds in local currency.

Connecting the dots
With the aid of Citi's global network, a flourishing business provides processing and clearing for international customers
From its beginnings, the City Bank of New York was involved in international transactions and finance. In 1902, according an industry observer of the time, it was the only bank that could pay out "any sum of money in any currency in any city in the world within hours." This means that it had to establish effective transaction services. Like its peers, it had a front office where officers assessed risks and made loans, and it had a back office where transactions were cleared and settled, and all the paperwork was processed. The bank's early focus on corporate clients with large foreign operations afforded it a unique perspective on the cash management and trade finance needs of international corporations . The bank took on the role of trusted adviser and business enabler to an expanding, global client base. In the 1980s and 1990s, with the rise of outsourcing and offshore manufacturing, Citibank expanded its transaction services network. Branch operations were established to offer cash management and trade finance to clients as they entered new markets, set up foreign subsidiaries, or entered into joint ventures. As Citi became more locally embedded, the local currency deposits generated by this expanding business allowed the bank also to provide banking services to local clients. In turn, as these local clients from the emerging markets sought to grow beyond their domestic markets, they relied on Citi to facilitate their trade flows, optimize the flow of cash across their expanding operation, and integrate the financial operations of new businesses they acquired. Citi served financial institutions by providing access to local clearing, settlement, and custody services in countries where they did not have a presence, and consequently established the industry's largest proprietary network. This network was further leveraged as the investment industry expanded. In the first decade of the 21st century, Citi acquired ABN AMRO's custody network, as well as Forum Financial and Bisys, to extend its suite of middle- and back-office capabilities in fund services. Asset managers and institutional investors across the Americas, Europe, and Asia rely on Citi for market access and core processing, accounting, performance management, and compliance-monitoring services that enable them to focus on growing their business. Citi connects diverse counterparties and enables flows across a broad range of financial and non-financial transactions, from helping multinational corporations manage their working capital, to helping banks in Africa and Latin America efficiently connect with trade counterparties in Asia. In the United States, Citi processes some 13 million passport applications for the U.S. Department of State each year. Today, Citi's clients across the corporate, financial, and public sectors rely on Global Transaction Services not only to "connect the dots" across their network of business entities and subsidiaries, but to deliver services that form a vital part of their financial operation.

Citi helps Tata go global
Reflecting the new global power of the Indian economy, an industrial conglomerate puts down roots in many countries overseas
The multinational conglomerate Tata Group, based in Mumbai, is the largest private corporate group in India. In the 1970s, Citi was a provider of transaction banking services to Tata. As the relationship developed, the bank became a strategic partner. Until the 1990s, the Tata Group was essentially a domestic conglomerate, with Citi India as one of its bankers. Under the guidance of its chairman, Ratan Tata, who took over the position in 1991, the group embarked on a journey of overseas expansion. By 2011, some 60 percent of the group's revenues came from overseas, compared with under 10 percent just a few years earlier. As Tata went global, so the relation with Citi broadened, to include access to global capital, strategic financial advisory services, and innovative financing solutions. After 2003, Citi was involved with most of the large capital issuances by the leading Tata companies, raising about $30 billion for the group. Two defining moments in the relationship came in 2007, when Tata Steel took over the Britain- based steelmaker Corus; and in 2008, which saw the acquisition of the Jaguar Land Rover business from Ford. The global credit crisis and consequent slowdown of 2008-09 brought tough times for Tata globally, but Citi stood by them in their time of need. Credit facilities were continued in India and overseas, and Citi successfully completed a series of capital-raising transactions, including the refinancing of the Jaguar Land Rover acquisition bridging loan. Pramit Jhaveri, who later became Citi's country head in India, was an adviser to these deals. As he put it, "It was courageous and visionary for the Tatas to move ahead with their global push, and equally courageous for us to put the weight of Citi's entire organization behind them." Wherever Tata extended their operations - the United States, Britain, South Korea, Spain, or Singapore - Citi was able to bring its network into play. By 2011, the bank was supporting the Tata Group in 21 countries where it had a significant presence.

Citigold: spreading affluence
The Citigold service was inaugurated in Hong Kong in 1982. It made Citi's global wealth-management expertise available to "mass affluent" individuals with $100,000 or more to invest. It was such a success that it was soon adopted, with local adjustments to the minimum investment required, by franchises around the world. By 2011, the service was available in more than 550 Citigold Centers in 36 countries and had just been introduced to Vietnam, where the bank's first retail branch in Ho Chi Minh City had recently opened. For Vietnam, which had a population of about 90 million, the minimum investment was set at $50,000. "The launch of the Citigold platform and the retail bank is a first step in what I think will be a many-step process of Citi entering the consumer space in a very big way," Vietnam country officer Brett Krause said. "The Citigold brand is fortuitous for us in Vietnam because gold is so important to the Vietnamese. It's a place where gold is central to people's wealth preservation. People trade gold, buy gold and store gold so to have a brand like Citigold is powerful in itself."

Risk is embedded as a core value
Recalling the role of senior credit officer, veteran Citibanker stresses importance of the right culture and experience in banking decisions
Walter Wriston believed that it is the business of bankers to evaluate risk. In his book Risk and Other Four Letter Words, he wrote, "It is almost impossible to exaggerate the importance to the general welfare of the willingness of individuals to take a personal risk. The worst thing that can happen to a society, as to an individual, is to become terrified of uncertainty. Uncertainty is an invitation to innovate, to create; uncertainty is the blank page in the author's typewriter, the granite block before a sculptor, the capital in the hands of an investor, or the problem challenging the inventive mind of a scientist or an engineer. In short, uncertainty is the opportunity to make the world a better place." Hollis Hart joined Citicorp as a management trainee in 1975. At the time, the bank had what many people considered the top company training program in the United States. After five months in New York, Hart was sent to San Francisco, first as a relationship manager and then to run a client team focusing on high-technology and financial companies. He later worked as the regional audit supervisor for Mexico and Central America, and was named a senior credit officer (SCO) in 1983. "Risk was particularly respected," Hart recalled 25 years later. "It was embedded in the cultural fabric of Citibank and became part of an individual's DNA from the day you joined. It wasn't looked on as some type of third-party function. It was a core value. Probably the single most prestigious thing that could happen was to be invited into the SCO fraternity." At the time, Citicorp had about 200 SCOs worldwide, of whom about half were based abroad. Credit approvals for large transactions required three signatures: one from the relationship manager who dealt with the client and two more from senior credit officers. At times, two SCO signatures had the power to commit the bank for an amount close to the lending limit of the institution. "A lot of it was trial and error," Hart said. "The experience of having been burned, while painful, was helpful - you needed the classic ability to see that although something may be doable and legal, it might be a bad idea. That comes with experience. It's one reason I'm personally reluctant to be too critical of junior people who do unfortunate things. Their charge really is to figure out if something's doable and legal and it's for their bosses and seniors - who have been through it, and have probably had own their hand burned on the stove - to say it might be clever, but we're not going to do it. So in an SCO you were looking for somebody who had seen patterns before, who could feel the momentum and the rhythms of the markets, and was not afraid to ask the right questions."

Diversifying the Nevada economy
In 1983, Nevada's Governor Richard Bryan invited Citicorp chairman Walter Wriston to bring the company's credit-card operations to Nevada. This was part of an effort to encourage non-gaming activities and so diversify the state's economy. The idea was to create a "cornerstone of economic diversity" for the state, which was able to offer low taxes, a business-friendly environment, and a large workforce trained in the hospitality industry. In 1984, Bryan called a special session of the Nevada legislature. It unanimously approved the investment, which eventually led to the creation of almost 2,000 jobs. Citi was the first multinational company in the financial services sector to locate a major business in Nevada.

Citi's first female CCO
Gladys Coupet joined Citibank in Haiti in 1974 as a credit officer and was named corporate bank head in 1979. She became the bank's first female country corporate officer (CCO) in 1985, when she was assigned to head the Haiti bank's operations. Coupet led the franchise through a coup d'étatin Haiti and a difficult period afterwards, when the economy underwent a crisis, the currency collapsed. She and her team were credited with professional conduct that protected the bank's employees and its clients' interests in Haiti under extreme circumstances. In 1996, Citibank was the only U.S. bank, and one of only two foreign banks, on the island. Despite subsequent decades of uncertainty and a devastating earthquake in 2010, Citibank Haiti managed to remain profitable and to reopen for business only 11 days after the quake, during which its branch building was razed. In 2011, Coupet was still in Haiti and was Citibank's longest-serving CCO. 

Maintaining a presence in Nicaragua
In 1985, six years after the Sandinistas had swept to power in Nicaragua, Stephen Long moved to Panama as regional manager for six Central American countries. Since Citicorp had an outstanding loan of $80 million with a Nicaraguan company, which became a sovereign debt when the company was nationalized by the new government, Long found himself on a plane to Managua. After checking into his hotel, Long received a phone call. Sandinista leader Daniel Ortega was sending a car to collect him. "I was expecting a limousine to show up with flags on and everything - and an army jeep showed up." After a long drive, he arrived at a golf course, where the basement of the clubhouse had been converted into Ortega's fortified headquarters. Long said Ortega "looked terrific" in his military uniform and sunglasses. The banker explained that Citicorp would be willing to swap the debt for property. "I've got to be honest with you," Ortega replied. "I've promised my people roads, schools, food and hospitals - and I have to deliver on those four things. If you think I'm going to pay you before I do that, forget it." Mindful of an earlier experience in Spain, Citicorp kept the branch open with a skeleton staff — a security guard and another employee who made monthly reports to the central bank. "We kept that license alive and paid the government $10 every year," Long said. Unfortunately, a subsequent régime refused to recognize it. However, in September 2008, Citibank announced the purchase of Grupo Financiero Uno. This followed acquisitions of local banks in El Salvador and Honduras.

Sandy Weill
Sanford I. Weill, known as "Sandy," started life as a runner, or messenger, for Bear Stearns. With friends, he started his own stock-brokerage firm and, through acquisitions, built a securities business which was sold to American Express in 1981 for almost $1 billion. Interviewed for Directors & Boards in 1998, Weill recalled those early deals: "Each one doubled the size of the firm. Hayden Stone was 30 times our size. Hentz doubled that. Shearson doubled the whole thing. Then in 1979 we bought Loeb Rhoades Hornblower, which doubled the whole shebang again." In 1985, Weill left American Express, and acquired a small consumer-finance company called Commercial Credit. After taking that company public in 1986, he built a diversified financial-services giant that included the retail brokerage Smith Barney, Shearson (which Travelers bought back from American Express), and the Travelers Corporation, founded in 1864. The name "Travelers Group" was adopted in 1995. In 1997, Travelers acquired investment bank Salomon Brothers, a leading bond-trading house, for $9 billion, and merged it with Smith Barney and Shearson. For Weill's former colleagues, his energy, entrepreneurial spirit, and capacity for doing deals left a lasting impression. Weill became a prominent philanthropist. For example, in the early 1980s, he worked with others to raise $60 million for the renovation of Carnegie Hall in New York. In 1998, he and his wife Joan gave generously to the Cornell University medical college. 

Card processing in new surroundings
With the growth of retail banking, back-office operations create job opportunities in business-friendly locations far from New York
When it celebrated its 10th anniversary in 1985, Citibank's retail banking operation was doing business with almost 17 million households in the United States and more than six million abroad. Although it had lost significant amounts of money over several years during the start-up phase, the business was finally profitable. Part of the turnaround reflected the strategy of reducing costs associated with the credit-card business. This involved either outsourcing, or establishing new businesses in relatively low-cost locations away from the New York area. In 1985, Citicorp completed construction of a new card-processing center in Nevada. It soon became a major source of local employment. In the same year, the company broke ground for a card-processing facility in Hagerstown, Maryland, a city in the northwest part of the Washington- Baltimore corridor. Citi's biggest card-processing center is in Sioux Falls, South Dakota. Established back in 1981, it gave employment to more than 2,000 people. During the planning stage, the bank was not sure it could find the necessary skills locally. The concern was misplaced. At the time, Charles Long was senior vice president in charge of the legal department. He recalled, "Within two years we had no problem hiring people, because once we put out the advertisements, South Dakotans from all over the country wanted to come on board. They were all accomplished computer people - communications people, systems programmers, the whole megillah. By 1984, we had over 3,300 employees in Sioux Falls. We had to build a post office." "Sioux Falls was about as remote as it gets," recalled Steven Freiberg, who was heading the global cards business in 2008. "We used to fly from New York to Minneapolis and from Minneapolis to Sioux Falls. When you changed planes in Minneapolis, for the first two or three years, the connecting flight was on a DC-3. These were the planes they were using in World War II. The only folks on the plane at the time were maybe me and couple of colleagues, and usually a small group of Japanese. We were the number two employer. Number one was a meat packer - and the Japanese guys were there buying beef to ship back to Japan." Low labor costs were not the only advantage to be gained by moving card-processing operations to South Dakota. The state government was more business-friendly than New York, in that it allowed the bank to charge a more realistic rate of interest on cards. "As a national bank we could export rates out of the state," Freiberg said.

Sowing the seeds for a modern private bank
Citi's private banking roots date back to the 1820s when a predecessor company of today's Citi Trust (a trust and estate-planning division) started managing the accounts of wealthy British and other European families domiciled in the United States. However, the private bank's modern form, as part of the Institutional Clients Group, can be traced back to an initiative by Walter Wriston, who formed the international services division. This merged all units within Citi that managed the financial-planning needs of wealthy individuals. Wriston's commitment to the business and its clientele was legendary. He was even known to have picked up a client or two flying into the airport at New York. These private-client relationships often brought in institutional business for Citi. In 1982, the division became the International Private Bank; and, in 1986, under John Reed, it was transformed into the Private Banking Group, with a business model that fundamentally continues to this day. It was in 1986 that the phrase "wealth management" was originally coined, and the decision made to be a private bank, as opposed to a brokerage business. The late 1980s and the 1990s saw rapid expansion to onshore centers from traditional offshore locations, such as Geneva and London, leading to the creation of a truly global private bank.

The company does the right thing
Citi writes off developing-country debts in 1986, but stands by its customers, with long-term business benefits
When the United States raised interest rates to counter inflation in the early 1980s, the value of the dollar soared against other currencies. Several countries that had borrowed dollars during the second half of the 1970s began to face repayment difficulties, leading to what came to be known as the "Third World debt crisis." Looking back on the $3-billion write-off on debts of Brazil and other developing countries in 1987, Citicorp chairman John Reed said it took him more than a year to convince everyone that it was the right thing to do. A year later, the chairman was still convinced as to the correct course. "I went back to the board, and this time they felt much more comfortable," he said. The write-off led to a net loss of $1.1 billion in 1987, the bank's first since 1934. Reed was unperturbed. "We were the lead negotiator in Mexico, Brazil, Argentina and these were the big countries at the time. So it was natural for us to take that first step." Citicorp later wrote off a further $1.7 billion from its cross-border refinancing portfolio. By 1991, Reed was able to say, "We put the cross-border refinancing portfolio issue behind us ... indeed, our corporate and consumer businesses in Latin America are thriving - because, unlike some of our competitors, we didn't back away from our customers there." However, in 1990, the board faced a new challenge when a downturn, particularly in the U.S. real-estate market, led to a fresh write-off. The following year, to strengthen its balance sheet, Citicorp sold stock to Prince Al-Waleed bin Talal, a grandson of the founding king of Saudi Arabia. He injected more than $500 million into the company in exchange for a minority shareholding. At the same time, Citicorp decided to mark up its venture-capital fund from book value to market value, recognizing a $457-million increase in capital.

Helping Chinese companies raise foreign currency
Citi plays a part in establishing the B-share markets in Shanghai and Shenzhen
In the early 1990s, the authorities in China decided to expand the country's equity markets, to allow local companies to raise foreign currency. They designated Shenzhen, the special economic zone bordering Hong Kong, for companies issuing shares denominated in Hong Kong dollars, and Shanghai for issues denominated in U.S. dollars. Dealing in "B shares," as distinct from local currency securities restricted to Chinese investors, the new markets targeted foreign institutional investors. "In fact it was very difficult to differentiate between what was being driven by the Chinese companies and what was being driven by the authorities," said Christine Lam, who had recently taken on a job in Citicorp's Worldwide Securities Services in Hong Kong. "This initiative was perceived as very revolutionary at the time and it would not have happened without the involvement of the authorities. China was taking a small step towards opening up its economy." The Shenzhen authorities approached Citi as well as HSBC and Standard Chartered, two of the three banks that issued currency in Hong Kong. "They came to the three banks because we had a solid reputation in securities clearing and the custody business," Lam said. "They ended up giving the business to all three - each bank had the clearing business for certain designated shares." The authorities in Shanghai contacted the same three banks, but ended up working exclusively with Citi as regards cash-clearing. According to Lam, "the Citi Shanghai management at the time was very involved, and close to the discussion. Citi was seen as on the ball, showing a great deal of energy and focus." Citi had a secret weapon - an adviser named Mariano Bengoechea, who was working for Worldwide Securities Services in New York as head of the Financial Markets Development Unit. Bengoechea had previously headed the Madrid Stock Exchange. "Mariano came and joined our team, and provided a lot of good advice in terms of the infrastructure," Lam said. "We were perceived as bringing industry knowledge and could call on global expertise." In both cases, Citi helped the stock exchanges design a set of clearing and settlement processes, which formed the back-office infrastructure. "Although we didn't write the programs, we were helping them set the parameters," Lam said. "Once we had established the rules and procedures for the way the market participants would operate, each bank in Shenzhen was awarded the settlement role for certain designated shares. We had to ensure that the investors were not individuals and were respecting the foreign exchange controls. The whole process had to be subject to approval by the regulators."

Technological advances point to the future
The 1980s see an increasing pace of change in banking processes, driving improvements to customer service
Major advances in computing, database management, and telecommunications in the late 1980s and early 1990s changed banking forever. "The big technological thing then was online interactive computing," recalled John Reed. "Batch computing was very common in the 1970s but it was in the 1980s and 1990s that you got into online interactive computing. Then the Internet, which is just a different version of that same technology, became extremely important. "You have a world today that's used to online interactions with financial institutions and markets. That changed both the back office, in organizational terms, and the interaction with customers. The other technological changes were big database management - which allows you to manage your databases very differently and gives you information that you didn't have before - and global telecommunications. It was in the 1980s and the 1990s that international telephone calls became easy. In the 1970s, we struggled." In the late 1980s, difficulties experienced by savings-and-loan institutions provided Citicorp with an opportunity to make acquisitions and expand its domestic branch coverage outside New York. It used this new network to take a lead position in the early forms of virtual banking. "At that point, John Reed moved away from the idea that physical distribution was compelling, and made the strategic bet that over the horizon ‘virtual' distribution would outpace physical distribution," said Steven Freiberg, who later headed the global cards business. "We did a lot of experimentation from an innovation standpoint with smart phones, things of that nature, trying to find ways to distribute that would unlock us from the high costs associated with a traditional, physical presence." At one point, Citicorp teamed up with Matsushita Electric Industrial Co. - the Japanese company behind the National and Panasonic brands - to experiment with banking via small-screen devices that could be attached to telephones. "John was pushing us down the path of leveraging technology, just as we did in the 1970s," Freiberg recalled. "It may have been early - we did not have a huge penetration of PCs, there was no Internet and everything was dial-up with low band speeds. So it was hard. But a lot of the seeds for what we do today - both in the U.S. and overseas, where we have limited distribution - were sown back in the late 1970s and the 1980s."

Korea desks overseas
To serve the banking needs of South Korean companies operating internationally, Citibank established its first Korea desk in the United States in 1990. Within two decades, another four had been set up in Britain, China, India, and Slovakia. By 2011, the desk in the Slovakian capital Bratislava was providing services to numerous South Korean companies that had recently entered the Central European market. These included Kia Motors, which had production facilities in Slovakia, and Hyundai Motors in the Czech Republic, as well as Samsung Electronics, which operated TV and LCD plants in Slovakia and Hungary. After arriving in Bratislava in 2010, second Korea desk officer Dong-Han Kum found himself driving more than 40,000 kilometers a year to visit Korean clients in Zilina in Slovakia, Prague, and Ostrava in the Czech Republic, and Budapest in Hungary. Sometimes client visits extended to Germany and Poland. "Face-to-face communication is the most important factor in attracting new customers and maintaining good relationships with existing customers," he said. In Slovakia alone, Korean businesses were estimated in 2011 to account for about 10 percent of gross domestic product and 15 percent of exports.

Citi keeps the lines open
In Colombia and Thailand, the bank's systems provide support during industrial disruption and public disorder
In the mid-1970s, during a period of growing nationalism in Latin America, Citibank was required to sell a 51 percent stake of its Colombian operation to local shareholders, at which point it was renamed Banco Internacional de Colombia. In the late 1980s and early 1990s, the Colombian government began easing restrictions on foreign ownership of banks, allowing Citibank to repurchase the shareholding. This transaction, which took place in 1991, was the largest ever on the Bogota Stock Exchange at the time and brought Citibank full control of $390 million in assets and 29 branches in seven cities. In 1992, Citicorp was able to help Colombia's Banco de la República de Colombia, the country's central bank. The occasion was a disruption of service at Empresa Nacional de Telecomunicaciones, the sole public telecommunications provider. With all communications lost, the country was effectively isolated for several days. The central bank was seriously affected by the disabling of both local and international fund transfers through SWIFT, the Belgium-based Society for Worldwide Interbank Financial Telecommunication. At that time, Citibank was the only institution in Colombia to be operating a satellite communications system that could be used as an alternative. Government officials contacted Citi's country officer, Gabriel Jaramillo, and asked if the central bank could be connected to the bank's network for the transfer of priority funds. In a few hours, a connection was set up and cash transfers were able to take place. At the request of Colombia's minister for communications, the bank's satellite system was then used for other urgent communications for the government, and for multinational and local clients, until the strike was over. Twenty years later, clients still remember the critical role that Citi Colombia played during those difficult days.

Multinational service in Barcelona
Established in 1991, the Barcelona Sales and Service Center has become a model for the promotion of diversity in the Citi workforce. In its first 12 years of operations, the center employed more than 3,400 people of more than 40 nationalities. Working in 16 different languages, they provided 55 services to customers in 22 countries across Europe. In 2005, the center received an award for being the best workplace in Spain. Four years later, the City of Barcelona recognized it as a model of work flexibility and cost efficiency that helped employees better reconcile their professional and personal lives. In 2010, the center signed an equality plan with local authorities, which was commended as best-in-class. The center has been committed to the local community, actively participating in volunteer programs every year. 

Brazilian aerospace giant finds strategic ally
Embraer becomes the world's third-largest maker of commercial aircraft
The Brazilian government engaged in aeronautical research as far back as 1941. However, it was not until 1969 that the country set up an aircraft assembly firm. Founded as a mixed-capital company controlled by the aeronautics ministry, Embraer initially had modest aims. The original plan was for a single hangar, a little over 500 employees, and monthly production of two Bandeirantes, a twin-turboprop light-transport aircraft of which the first prototype, completed in 1968, had taken more than three years to build. The aeronautics ministry later signed a contract for 80 of the twin-turboprops, paving the way for the first delivery of the Bandeirante to the Brazilian air force in 1973, and the first export of the aircraft to Uruguay two years later. By 1979, Embraer had a marketing and sales subsidiary in Florida that also offered technical support to customers in the region. Over the following decade, a partnership developed with Citibank as Embraer developed other models, set up a subsidiary in France, and continued expanding its client base and working on new aircraft development. In 1994, privatization took Embraer to a new level in the global aviation business. It soon began exporting regional jets to meet a market need for models flying relatively short routes, particularly in Europe and the United States. Citibank became a strategic ally in financing overseas sales, helping set up international subsidiaries and providing support for cash-management services. At the turn of the century Embraer launched a new family of jets, which gained recognition for their flexibility, dependability and customer value. In 2000, Embraer launched a new family of jets, which gained recognition for their flexibility, dependability, and customer value. By 2010, Embraer had become one of Brazil's largest exporters. It had 17,000 employees, and subsidiaries in the United States, France, Portugal, China, and Singapore, as well as six units in its home country. Today it is the market leader in commercial jets with up to 120 seats, has 19 percent of new deliveries in the global executive-jet market, and is seeing sustained growth in its defense and security division. According to Citibank executive Fernando Ayres, Citibank adopted tailor-made approaches as the company developed. "Embraer has suppliers both in Brazil and abroad. The term for which a sale is financed carries interest-rate risks, and the liquidity that the company has within Brazil is subject to foreign-exchange risks and variable interest rates," he said. "During its years of growth, Embraer went through periods when it needed currency-hedging, protection with derivatives to safeguard the operational part. In this context, Citi was a very important player for Embraer, particularly in the treasury area, in the closing exchange rate and derivatives areas, and in international cash management." 

Marketing talent
A key contributor to Citi's success in consumer banking was Ajay Banga, who exemplified the company's willingness to take on good people from outside the industry. Like many other people hired under John Reed in the 1980s and 1990s, Banga did not have a banking background. When he joined the company in 1996, his most recent experience had been in launching the international fast-food franchises of PepsiCo in India. Before that, he spent 13 years with Nestlé in various sales, marketing, and general management positions. "John was in many ways a visionary way ahead of his time," said Banga, who ran the international side of the Global Consumer Group, before being put in charge of the Asia Pacific region in 2008. "He's the person who drove the recruitment of people like me. In the past, I used to hear people in Citi saying they ‘trained' the client to do things - use a machine or do business in a particular way. That changed and we organized the business around the client. It's very different terminology, a very different way of thinking. To get people in from different backgrounds increases diversity of thought within any company and truly makes you far more client-centric. These people come from technology companies, consumer product companies, government service - all kinds of backgrounds. People are geographically and ethnically diverse but it's their backgrounds that create such a rich culture and add enormous value to the company."

Branding before the Citigroup merger
Traditionally, banks did little in the way of brand-building, believing that their businesses were based largely on personal relationships and reputation. National City Bank's approach began to change during the 10 years following the end of World War II. Business growth both at home and overseas, despite the Marshall Plan, was marginal. The bank responded by creating the Specialized Industries Group in 1954 to improve relationships with its corporate banking clients. In association with that initiative, it began a first-of-its-kind advertising campaign that lasted almost 20 years, and positioned Citi's bankers as trusted advisers and not simply lenders. Graphics and text emphasized Citi's unique combination of industry knowledge, global reach, and expertise in a full range of financial products and services. Other banks soon followed suit. By 1970, branding considerations were firmly established. The bank's first executive strategy review that included branding was initiated by Walter Wriston. It resulted in the creation of the Citibank and Citicorp brands in the mid-1970s. The year 1977 saw the adoption of the slogan "The Citi Never Sleeps," positioning the introduction of the bank's pioneering ATM network as an example of the bank's commitment always to "be there" for its customers. Wriston's successor John Reed continued to weave branding into the strategic thinking of the bank. He began to recruit experienced marketing specialists from the retail and consumer-products industries. In 1997, strategic emphasis was placed on strengthening brand equity: the power of a brand in the marketplace earned through goodwill and name recognition. According to Susan Avarde, who was hired to lead the initiative, "John Reed recognized that if he could make the Citi brand as widely recognized as Coke, Nike or Sony, future generations of customers would be drawn to Citi when they were ready for their first banking relationship."

A new stock symbol
For two months after the merger, the shares of the new organization were traded on the New York Stock Exchange under the symbol "CCI," which had designated Citicorp from 1985. From December 4, 1998, Citigroup shares were traded under "C," one of only a few single-letter stock symbols used on the exchange.

Capital markets after the merger
The combined strengths of Citicorp's investment bank and Travelers' broker-dealer create a powerhouse
The acquisition of retail brokerage Smith Barney in 1988, Shearson in 1993, and investment bank Salomon Brothers in 1997 created for Travelers Group one of the best-capitalized firms in the industry with capital of some $9 billion and a balance sheet of $276 billion. Operating earnings were $1.6 billion on net revenues of $11 billion. The merged entity, known as Salomon Smith Barney, was essentially a U.S. domestic franchise with outposts in London, elsewhere in Europe, and Japan. Before 1998, Citicorp did not have a broker-dealer unit, although it did have an investment business serving Fortune 500 multinationals. It operated at 80 sites worldwide in 1997, trading currencies, bonds and derivatives around the clock. Some of the traders worked for corporate and institutional investors, and others for Citibank's asset management organization, which offered mutual funds through the consumer bank. It also underwrote bond issues in the United States, Western and Eastern Europe, Asia, and Latin America. Citicorp also had particular strength in emerging markets. The Citicorp-Travelers merger in 1998 created a new force in the industry. The sales-and-trading business overall became increasingly global, with a focus on trading in companies with a market capitalization worth more than $10 billion. According to James Forese, CEO of Securities and Banking, Institutional Clients Group, Citibank had a network of corporate client relationships, particular expertise in derivatives and foreign exchange, and "a reputation for being great problem solvers;" while Salomon Smith Barney had excellent institutional investor relationships and a very sophisticated product platform. Jim O'Donnell, Head of Global Investor Sales and Relationship Management, Citi Global Markets, said, "By putting these two platforms together, we created an organization really strong in sales and trading and in investment banking. The merger created synergies in our ability to use the Citibank balance sheet to deliver for our corporate customers. We were able to become a powerhouse in the bond underwriting business by leveraging our corporate lending." Since Citi's global network was even more extensive and robust than Salomon's, "we were able to offer a much broader and deeper array of products around the world to our largest customers." The Salomon Smith Barney retail distribution channel also benefited from the creation of Citigroup. It gained access to an enhanced mix of equity and fixed-income products, and other Citibank products. In 2009, Citi launched a joint venture with Morgan Stanley that combined Citi's Smith Barney in the United States, Quilter in Britain, and Smith Barney Australia with Morgan Stanley's Global Wealth Management Group to form Morgan Stanley Smith Barney, a new global leader in wealth management. By 2011 the sales-and-trading activities of Citigroup had been integrated, covering the debt and equity markets on behalf of institutional investors. According to Paco Ybarra, who had been with Citi since 1987, for major corporate clients, "we became the go-to bank when clients had to engage in significant issuance of debt. We had the capital to handle and undertake significant risk. We had the connections, and the dialogue with both corporates and investors."

Momentous encounter leads to merger
The leaders of two of the United States' financial services giants see the potential in a strategic merger, and Citigroup is born
One spring evening in 1998, Citibank's chairman, John Reed, sat down to dinner with Sanford I. Weill, the chief executive of Travelers Group. The two men were in Armonk, a small hamlet in Westchester County, New York, where Travelers Group had a conference center. The subject of their conversation was a $140-billion merger. Some weeks earlier, 20 of Weill's top executives had met to consider possible new acquisition targets. Someone proposed Citicorp. "As we talked, I saw that the idea really wowed the group," Weill wrote in his memoirs. "Citicorp stuck out like a strategic home run." After their dinner in Armonk, Reed and Weill met for a Friday morning breakfast with their respective teams. They looked at what each side might bring to the table. Citicorp had its unique global position and strengths in credit cards, foreign exchange, private banking, derivatives, and relationships with multinational companies. Travelers Group had leading franchises in consumer finance, insurance, asset management, investment banking and capital markets, as well as an array of distribution platforms. It was decided to arrange the combined organization in three broad areas - consumer businesses; corporate and investment banking; and private banking and asset management. The group agreed on 50:50 ownership and an 18-member board for the new company, which would take its name from the "Citi" in Citicorp and the "Group" in Travelers Group - to form "Citigroup." Discussions continued through Saturday. Agreement was reached on an arrangement whereby Reed and Weill would each have a veto over big decisions. According to Weill, the final decision to move ahead came on Sunday morning, when he received a call from Reed. Three days later, the Travelers Group board met to discuss the merger, with briefing papers that described the companies as "Jupiter" for Travelers and "Saturn" for Citicorp. News of the merger was released to the world on April 6, 1998. "Undoubtedly, putting together such giants would propel us into a universe of our own," Weill said. Crucial to the rationale underlying the merger was the prospective repeal of the Glass-Steagall Act (Banking Act) of 1933, which had stipulated the separation of commercial and investment banking in the United States. The repeal was signed into law by President Bill Clinton on November 12, 1999.

A transatlantic merger
Sir Winfried Bischoff, former chairman of Schroders, explained that the decision to sell the investment bank to Citi came from a recognition that it needed capital to expand. "Between 1984, when I became chief executive, and 2000, the stock price of Schroders had gone up about a hundred times. So from a relatively small firm it became a sizable firm - from a $100-million firm it became a $10-billion firm. We had a half-way decent European business, we had an outstandingly good U.K. business and we had a very good Asian business ... the only possible buyer would have to be a large American firm." This meshed with Sandy Weill's strategy of expanding Citigroup by acquisition. Sir Win recalled, "I felt that Salomon together with Citibank together with Schroders would actually be a pretty complete entity."

Client focus in wealth management
When dealing with people who shape global trends in business and culture, a globalized, institutional service is the key to success
Citi may not have been the first financial-services group to offer private-banking services but the Citi Private Bank can claim to have helped reshape the industry, and it is still a driver of transformation. Among its clients are influential figures in the worlds of commerce and culture. Their professional lives in many instances have acquired a global perspective, and in the personal sphere, too, family trees often branch into several countries. As a result, many families think like multinational institutions when deliberating strategies for creating or preserving wealth. According to Jane Fraser, chief executive officer of Citi Private Bank, the institution seeks to combine relevance to modern circumstances with deep-rooted core values. Globality, trust, and partnership are the underlying themes in the bank's relationship with its customers. "Today, we see rapid economic growth in the emerging markets, inter-generational wealth transfer happening on a massive scale, and the game-changing digital revolution," Fraser said. "This demands a brand of private banking that is constantly evolving to fulfill clients' aspirations." The notion of a private bank with a modern edge had its beginnings in the mid-1980s, when mahogany-paneled boardrooms and an emphasis on banking secrecy still typified the industry. Citi transformed traditional private-banking booking centers into investment centers. These had something of the atmosphere of a trading floor, supported by the intellectual firepower of analysts and economists. Citi provided tailor-made strategies to clients needing sovereign diversification and portfolio sophistication. "Citi also started to serve clients and client families in their home country or abroad according to the choice of the client, not of the bank - a smart move, as we had locations abroad and our competitors did not," said Ed Montero, formerly vice chairman of the Citi Private Bank. The client's relationship with the private bank became multi-pronged. "It was no longer conceivable that one private banker could provide for all the diverse needs of a client in a rapidly evolving financial services environment," said Deepak Sharma, formerly chairman of the private bank. "A team-based approach, supported with specialists in various asset classes, with the private banker as the primary relationship manager, was introduced by Citi and soon became the industry's modus operandi," he said. With the 21st century came the concept of "private investment banking," a bespoke offering sensitive to the intricate connections between the business and personal wealth of a client. "Next Generation" wealth planning was also introduced in this era. "We established relationships not just with the patriarchs or matriarchs of wealthy families but also with the children and even the grandchildren," said Sharma. "This helped to shape Citi Private Bank as the place to go to build and protect a family wealth legacy."

Powerhouse emerges in London
A long-standing presence acquires greater investment-banking momentum with the formation of Citigroup
Citibank's history in London goes back to the presence established in 1902 by the International Banking Corporation, which became a wholly owned subsidiary of National City Bank in 1919. Nearly a century was to pass, however, before the bank became the sort of corporate and investment banking giant in London that it was in New York before the Great Depression. After World War II, the London franchise became a leading force in the eurodollar market and started to build solid relationships with British and other European clients. From the 1970s, it was a dominant player in the London market for foreign exchange and derivatives such as currency and interest-rate swaps, a mantle it retained for decades. Citi also set up a merchant-banking subsidiary in London and made a strategic move by investing in two British securities firms, gaining access to institutional investors. Yet, as the bank was preparing for the "Big Bang" reforms of the London financial markets in 1986, its attempts to create a financial powerhouse in London arguably never realized their full potential. Moreover, Citi's relationships with British and other European clients lacked the scale and depth of its ties to U.S. clients. The merger with Travelers Group in 1998 partly resolved this conundrum by adding the Salomon Brothers investment-banking business in London. Yet, Travelers too had only limited relationships with British and European clients, notwithstanding its significant investment-banking presence in London and deep ties with U.S. issuers and investors. The decisive move was the acquisition of the investment-banking business of British asset management giant Schroders for £1.36 billion ($2.21 billion) in 2000. Founded in London by German merchant bankers in 1818, Schroders was an outstanding British investment bank and was also strong in Asia, where it had set up Hong Kong's second merchant bank in 1971. The deal allowed Citigroup to double its investment-banking staff in Europe to 600 professionals and become the biggest underwriter of dollar-and euro- denominated corporate bonds. This made Citigroup the second-biggest underwriter of European equity and equity-linked deals. Sir Winfried Bischoff, as the chairman of Schroders, stayed in London after the acquisition to expand Citi's investment-banking business across Europe, the Middle East, and Africa. He later moved to New York, ultimately serving from December 2007 to February 2009 as the first-ever non-U.S. chairman of Citigroup.

An international perspective
Charles Prince recognized the value of Citi's worldwide network. He believed that managing the group required an equivalent mindset. Shortly after his retirement he elaborated, "Not only do you have to be careful not to project your internal experience onto an external environment, you have to be very conscious of internationalizing your structure - your board of directors, your management team, your risk infrastructure, all of the girding that goes along with running an international bank. … We tried to bring in a lot of people who were international in scope - people who came from overseas and had experience in, and were attuned to, an international way of thinking about things." 

Investment in Poland
Among Citi's major transactions during the early years of the 21st century was an investment in Poland's Bank Handlowy w Warszawie, which joined the group in 2001. Bank Handlowy, established in 1870 by businessman, political activist, newspaper publisher, and philanthropist Leopold Kronenberg, is Poland's oldest commercial bank and was one of the few banks supporting trade with Western Europe and Russia before World War I. After 1945, it became the main correspondent bank for foreign banks in Poland. Bank Handlowy returned to the Warsaw Stock Exchange in 1997, after an absence of almost 60 years. Citibank had established a Polish subsidiary in 1991. Under a deal completed in 2001, Citibank transferred all the assets of its Polish company to Bank Handlowy in exchange for a majority of Handlowy's shares. By 2011, Bank Handlowy was serving more than 20,000 corporate clients and more than a million individual customers. A wide range of corporate, investment, and retail banking services is offered under the Citi Handlowy brand.

Courage in a crisis
When the World Trade Center is attacked in 2001, staff show courage and determination in helping others and maintaining operations with little interruption
In Manhattan, on the morning of September 11, 2001, the sky was a crystal blue. Robert Weiss was manager of the Citi branch at the World Trade Center. He was in a meeting with his area boss at the 120 Broadway branch, not far away, when, at 8:46 a.m., an American Airlines Boeing 767 crashed into the north face of the North Tower of the World Trade Center. Weiss's immediate reaction was to head back to the disaster site to check on the welfare of his branch staff. The sky above was full of flying paper, and he had to fight his way against a panic-stricken crowd heading in the opposite direction. Finally, Weiss reached the branch, where the staff had been following the bank's emergency shutdown procedure, locking away cash and valuables. With assistant manager Evelyn Rivera, Weiss evacuated the staff, checking behind doors and under desks to make sure that no one was left behind. Citi had other premises at 5 World Trade Center, which Weiss could see through the branch window. Before he could make his way across the plaza, at just before 9:03 a.m., a second plane struck, this time hitting the South Tower. "It was like an earthquake," Weiss recalled. There was no chance of crossing the open space as plane wreckage and other debris rained down. Getting no response to his attempts to make phone contact, he assumed the staff at no. 5 had all left, and he made his way back to 120 Broadway. Just as Weiss got inside the building at 120 Broadway, just after 9:59 a.m., the South Tower began to collapse, throwing out a dust cloud and blast wave that blew in the windows of the branch. Initially, the staff took refuge from the dust behind closed doors, but then decided to make their way down to the subway station beneath the building. Visibility was terrible - everyone was choking on the dust, and the station was packed. Weiss returned to the branch and found an escape route through the back of the building. He went down below once again, screamed out the names of his staff, rounded them up, and led them out of the station and on foot to safety in the direction of the South Street Seaport area. Invited to shelter temporarily in a restaurant, at 10:28 a.m., the group gazed in shock at a television screen as the North Tower came down. Six Citi staff lost their lives in the disaster. All of them had been visiting the twin towers on business. When the South Tower was hit, the emergency shutdown process began at all Citi's branches in the vicinity. Over 16,000 Citi employees were evacuated from their places of work in lower Manhattan. They included over 2,000 working in the asset-management business, whose office building, 7 World Trade Center, collapsed later in the day at just after 5:20 p.m. However, with only minor interruptions, the computer network, including ATMs, continued to function throughout the emergency. Within an hour or so of the collapse of the North Tower, most of the bank's telecommunications systems were back up and running. By September 21, all the bank's operations, other than those actually on the disaster site, were functioning fully.

The staff rises to the occasion
After the disaster, the authorities declared an exclusion zone, initially south of 14th Street and, later, below Canal Street. In cooperation with the fire and police departments, the bank's branches at Broadway and City Hall were opened up as volunteer centers, so that the search-and-rescue teams at the rubble pile had somewhere they could clean themselves up, sleep, and get something to eat and drink. At 111 Wall Street, a rest station was manned by some 300 Citi volunteers for more than three weeks, 24 hours a day. Aware that many members of staff would be emotionally traumatized, management gave permission for anyone who wished to stay home the day after the attack to do so. However, such was the spirit of solidarity, that attendance the next day was 100 percent - and many employees made their way to work even when they were not rostered to do so. A campaign, Citi for the City, was set up soliciting donations for widows and orphans of firefighters who had lost their lives. According to Dana Blythe, who helped organize the campaign, some $300,000 was collected. This was distributed to bereaved dependents connected with several firehouses, and part of the money paid for a fire-education truck, which traveled around New York's schools. A Citigroup relief fund was set up for children of all 9/11 victims. The company made an initial donation of $15 million. The money went to fund post-secondary scholarships for children of those who were killed or permanently disabled in the 9/11 attacks. Contributions came in from all over the world. 

Mergers create banking giants abroad
In Mexico and Poland, old-established banks with their own histories and traditions join the Citigroup worldwide network
Under the leadership of Sandy Weill, Citigroup pursued an active program of acquisition. In 2001, the company acquired Mexico's Grupo Financiero Banamex-Accival for $12.5 billion, the largest U.S./ Mexico corporate merger to that date. Three months after the merger was completed, Banamex celebrated its integration with Citigroup at an evening ceremony at its Santa Fe complex in Mexico City. Overnight, 35.9 million transactions had been transferred, 117 Citigroup systems had been interconnected, and 200 systems of both institutions had been closed down. The integrated operation comprised more than 1,400 branches and more than 4,200 ATMs. "While similar integration processes in our country between banks that are our competitors have required 12, 15 and up to 24 months to be completed, we completed the most important phase in three months," said Manuel Medina-Mora. "Today we are one single bank. And we are making history." Banamex was founded through the 1884 merger of Banco Nacional Mexicano and Banco Mercantil Mexicano, two banks that had operated independently since 1882. For the next 30 years, it had dual roles as both a commercial bank and a central bank, issuing banknotes and collecting taxes. It was nationalized at the onset of the Latin American debt crisis in 1982 (Mexico was one of the first countries to be seriously affected) and run as a state-owned credit association for nine years, before being reprivatized in 1991. Citigroup itself has very deep roots in Mexico. The International Banking Corporation, later acquired by National City Bank, set up its first branch in Mexico City in 1903 and a second in Monterrey the following year. Although both were closed during the revolution which began in 1910, National City Bank opened in 1929. Three years later, it was not affected by a government order banning foreign banks from opening branches. As a result, until 1994, Citibank was the only foreign deposit-taking institution in Mexico.

Innovative approaches in Turkey
Citibank proposal opens door to IMF support, addressing U.S. concerns
Citi's involvement in Turkey dates back to the period following World War II, when the bank arranged financing for government and public works projects. In 1975 Citi established a representative office in the country when Citicorp Management Services established the Istanbul office on behalf of the bank. On May 8, 1980, the government issued a license to Citibank to operate a full-service branch in Turkey. Almost exactly a year later, on May 1, 1981, Citibank's new branch opened its doors. In 1984, Citibank created the Capital Markets Group, a global initiative to contribute to, and operate in, emerging domestic capital markets. Citi's Turkish arm actively involved itself in promoting and supporting the Turkish economy and in 1988, Citi launched direct custody and clearing services in Turkey. Today, Citi is a leader in the provision of custodial services. By September 1991, Citibank was the largest foreign bank in the country. That same year, in line with its commitment to support development of financial markets in Turkey, Citibank produced plans to modernize the regulatory and technological underpinnings of the country's financial infrastructure. The purpose was to open it to world capital flows and inspire investor confidence. In 1993, the company inaugurated its Turkish retail banking business and opened a model branch in Istanbul. Three years later, Citibank introduced credit cards to Turkey. In a November 2011 interview published in Dunya (the leading economic daily in Turkey), Serra Akcaoglu, Citi's country officer in Turkey, announced the company's next step in supporting Turkey's economic development. "Citi franchises operating in countries with which Turkey has intense trade will establish Turkey Trade Desks in those markets. This means that we have people familiar with Turkey and Turkish regulations sitting at the Turkish desk in these markets." Akcaoglu added: "Establishing foreign trade desks for Turkish exporters and investors will not be sufficient. We, as Citi Turkey, would like to establish a foreign trade desk here in Turkey to provide banking services to companies doing business in markets where Turkish companies export."

New frontiers in corporate governance
Events in America and Japan highlight the importance of dealing promptly with regulatory issues
By 2002, the investment-banking industry was facing a wave of criticism, which could be traced back to the collapse of the Internet-stock bubble in 2000. By mid-2001, such criticisms were being voiced in regulatory circles, and New York State Attorney General Eliot Spitzer announced an investigation into the research practices of the investment bank Merrill Lynch. The regulators then turned their attention to Citi. Sandy Weill directed the group's investment-banking division, Salomon Smith Barney, to take the initiative and draft proposals for reform that would address the questions being raised across the industry. In the period 2002-2005, Citi also faced regulatory issues in Japan. Transactions were discovered within the Japanese operation of Citi's private bank that violated Japanese regulatory requirements. In response, Japan's Financial Services Agency required the termination of Citi's private-banking operations in Japan. Charles Prince saw the regulatory problems as partly a consequence of organizational issues arising from the merger between Citicorp and Travelers. Even by the standards of matrix management, reporting lines had become confused, with business heads reporting to too many bosses both within and outside Japan. The consequences were profound for the way in which Citi ran its business in America and worldwide. Prince made compliance a matter of the utmost priority. He oversaw the drafting of a five-point plan that, crucially, included the creation of an independent global compliance function. By 2007, another challenge was facing the company: subprime mortgages in the form of collateralized debt obligations. Owing to a severe downturn in the housing market, Citigroup faced substantial losses and, on November 5, 2007, Charles Prince announced, as part of a statement, that "given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as Chief Executive Officer is to step down." Prince was briefly succeeded by former treasury secretary Robert Rubin, who took on the role of interim chairman. Sir Winfried Bischoff became interim CEO. Sir Win, an Anglo-German banker who had spent most of his career with Schroders plc, became chairman at the end of 2007, when the board selected Vikram Pandit as Citi's new CEO. Pandit had joined Citigroup when it acquired Old Lane Partners, a hedge-fund management and private-equity fund that he co-founded. Pandit continued the reinforcement of good governance as a core element in Citi's global culture when he identified responsible finance - "conduct that is transparent, prudent and dependable" - as an indispensable principle. On February 23, 2009, Sir Winfried Bischoff was succeeded as chairman by Richard Parsons.

Citi staff back would-be entrepreneur
"Ah-Geok" worked for a company that provided cleaning services to the International Personal Bank (IPB) division of Citibank in Singapore. Her husband had suffered a stroke, and she had two sons in school. Consequently, she had to hold down two jobs to make ends meet. At the time, the division was being run by Amy Tan. According to Ah-Geok, "Amy knew of my plight as a sole breadwinner and my background of having cooked noodles at a stall at the market. So to help me make a little extra money, she asked me to cook noodles and sell them to the staff throughout the year. That really helped." What Ah-Geok really wanted to do, however, was to run her own food-stall business. She sought Tan's advice. "I asked her if I should continue working at IPB, because it treated me well, or set up a business like I wanted to." Tan urged her to set up her own business and assured her that, if she did not have the means, the IPB employees would help on a personal basis. The Citibankers came together to raise the initial capital, and Ah-Geok was able to resign from the cleaning company in 2004. Soon, she was operating a food stall at Victoria Junior College, a local senior high school. Seven years later, she was still running her business. "The help that the IPB staff extended to me went far beyond just financial assistance. As a cleaner and first-time stall owner, I had no idea where to begin in setting up a food business. These bowls, plates, cutlery and even the fridge that you see were all ordered by them. They had a committee set up to help me start my business from scratch." Ah-Geok has made a point of keeping in touch with the staff and visiting them regularly. "During the school holidays, I'll fry some noodles and bring them down to them at their office," she said. "Favors can be returned but human kindness can never be repaid."

Banking fosters sustainability
For Citi, environmental awareness is a factor in investment decisions, and in the company's own operations
Citi has taken a leadership role in promoting sustainability as an essential facet of responsible finance. This is an ongoing commitment. In 2003, for instance, Citi was one of four banks that co-developed the Equator Principles, a voluntary set of industry guidelines established to manage the environmental and social risks of project finance on a global basis. Since 2005, Citi has helped finance global infrastructure and development projects run in accordance with the principles to the tune of over $100 billion. Citi was elected Chair of the Equator Principles Association in 2010. By the following year, over 60 financial institutions were adhering to the principles. When making many project-finance decisions, Citi takes the sustainability issue into account. In May 2007, for example, the company announced a $50-billion, 10-year initiative to finance, and invest in, low-carbon projects and technologies. As part of this initiative, in the United States, Citi helped finance five photovoltaic systems across four campuses in the city of Los Angeles, California. The result was a reduction in the cost of electricity of up to 15 percent. In China, Citi was a joint bookrunner for the initial public offering, on the Hong Kong Stock Exchange, of China's second-biggest maker of wind turbines. Sustainability is a priority in Citi's own operations. In 2010, the company announced its intention by 2015 to reduce greenhouse-gas emissions from its buildings by 25 percent compared with 2005. An example of sustainability in practice is the Frankfurt Data Center. Among other features, the design is optimized for fresh-air "free cooling." The building uses harvested rainwater for all its irrigation needs. Over 70 percent of the roof area is planted with vegetation. Recycled materials were used extensively in the construction. By 2011, a total of 185 Citi facilities had achieved U.S. Green Building Council Leadership in Energy and Environmental Design (LEED) certification.

Citi microfinance brings scale
Established in 2005, Citi Microfinance is a commercial initiative. It works with Citi's other businesses and across regions to provide products and services for microfinance institutions (MFIs) - networks and investors lending to the underserved. Citi Microfinance serves more than 100 MFIs in over 40 countries around the world, and has helped make microfinance an integral part of the global financial infrastructure. Citi supports the commercial development of MFIs through: 
• Local currency funding and transaction services 
• Corporate finance and capital-markets solutions 
• Credit, savings, insurance, and remittance products 
• Innovation, financing, and product development with MFIs and other partners 
• Encouraging transparency and proper risk management within the industry 
Under a successful partnership launched in 2006, Citi and the U.S. Overseas Private Investment Corporation (OPIC) have provided more than $270 million in funding to 34 MFIs across 19 countries. The MFIs have created microloans for more than 900,000 borrowers, 92 percent of whom are women. 

Gradual integration of the emerging-markets business
According to Paco Ybarra, the previous merger experience of Salomon Brothers and Smith Barney was useful to them when the time came for Travelers Group's merger with Citicorp. "They were probably better prepared than we were on the Citicorp side," he said. "They knew what they wanted to get out of the arrangement. Citi's approach was a bit more disjointed." It took several years for the cultural differences between the two organizations to be reconciled. In particular, Citi's emerging-markets business, known at the time as "local markets," did not become formally integrated with the rest of the group's markets business until 2006. Ybarra, however, saw the gradual nature of this process as a plus: "The emerging-markets expertise at Citi was one of our competitive advantages. It was not disrupted by the merger with Travelers. When integration came, it came in a way that was completely natural and created no angst in the system. I think even today it continues to be a core strength, and one of Citi's differentiating features." 

Banking in transit
Much of Singapore's five-million population goes to work on the MRT (Mass Rapid Transit) rail system, which closely maps to the major centers of population and retail activity. In 2006, Jonathan Larsen was manager of Citi's consumer banking in Singapore. He was attracted by the idea of a partnership with the system's operating company, SMRT Corporation Ltd. A tie-up already existed, in that Citi provided settlement services and technical support for the MRT's contactless fare card system, EZ Link. At the same time, SMRT was exploring ways to enhance commuters' everyday travel experience, while maximizing the commercial potential of the public transport infrastructure. Building on the existing relationship with SMRT, a plan for a co-branded credit card was initiated to give Citi customers loyalty rewards in the form of travel entitlements. Issuing cards required business premises. This sparked the idea that if branches were set up in MRT stations, banking services could be extended from cards to loans, salary accounts, indeed to a whole gamut of products. The prospect of opening branches on the transit system promised a major enhancement of Citi's brand visibility, or "perceptual scale," as Larsen described it. A partnership between Citi and SMRT was announced in December 2006. Two branches were opened in SMRT's Bugis and Tiong Bahru stations the following February. The number of Citi branches in or near SMRT's stations grew steadily to 11 by mid-2011. 

A model for diversity
With operations in over 100 countries around the world, Citi values the rich variety to be found in its multinational, multiethnic staff
A diverse workforce is a competitive advantage for a company that operates, as Citi does, in over 100 countries and territories throughout the world. In this context, Citi has focused on four specific areas: management accountability, attracting talent, workforce development, and the work environment. For instance, Citibank Korea has a Diversity Committee, launched in 2006. Together with the Women's Council, it promotes initiatives developing female talent, has helped establish a merit-based system, and has advocated increased emphasis on enhancing work-life balance and quality of life in general. Citibank Korea was recognized by Korea's Ministry of Gender and Equality, among other bodies, as one of the most desired workplaces for talented, top-performing women. Each year, Diversity Week is held in Citi's Europe, Middle East and Africa (EMEA), and Latin America and Mexico (LATAM) businesses. In 2010, a total of 63 countries across two regions sponsored events. In EMEA, the theme was "Reflecting on unconscious bias" and events included debates, training and cultural offerings. In LATAM, an event ended in a celebration in Mexico City involving 22,000 employees and their families. As of 2011, there were 60 employee networks representing diverse cultures and communities across 18 locations in Canada, the United States, Britain, and Ireland. They included African Heritage, Asia Pacific Heritage, disability, Hispanic Heritage, Military Veterans, Pride (for the lesbian, gay, bisexual, and transgender community), Women, Working Parents, and several multicultural networks. As a co-chair of one of the Pride networks put it, "The employee networks welcome our whole, authentic selves to enrich the organization. Citi is a cosmopolitan place - global and diverse, as are our clients. Our networks reflect this richness - and I am richer for it." 

Partnering with native Americans in the South Dakota
The establishment of the South Dakota operation brought the bank into contact with local Native American communities. In 2007, Citi provided debt-and-equity financing to the tune of $9.3 million toward a $10-million housing development of 100 units on the reservation, which, like others in South Dakota, suffered from an acute shortage of affordable housing. In Ziebach County, ranked as the poorest county in the United States, the Citi Foundation began partnering with the Four Bands Community Fund in 2002, to provide hundreds of thousands of dollars in the form of grants and technical assistance .

Amid economic turmoil, Citi recapitalizes
As crisis hits the financial world, the U.S. government backs Citi
For the United States, the first years of the 21st century were a time of low interest rates and an inflow of investment funds from fast-growing emerging economies and oil-producing countries. One consequence was the widespread availability, and build-up, of low-cost private debt, which fueled over-expansion in the housing market. In late 2007, market conditions began to deteriorate, home prices started on what became a steep decline, and residential-mortgage defaults began to rise. The increasing defaults and subsequent drop in the values of mortgage-backed securities weakened many financial institutions, including Citi. Facing significant losses on its mortgage portfolio, Citigroup commenced raising capital through public and private offerings that raised more than $30 billion over two months in late 2007. However, in 2008, economic conditions deteriorated further, culminating in the collapse of the 158-year-old Lehman Brothers investment bank in September, and prompting further upheavals in the credit and equity markets. Amid widespread uncertainty in the banking sector, in October the U.S. government stepped in with the Troubled Asset Relief Program (TARP). Initially, this provided a combined $125 billion in preferred equity to nine major U.S. financial institutions in order to strengthen their capital positions and boost the broader economy. Citi received $25 billion in TARP capital in October and an additional $20 billion in capital in November 2008. Citi also entered into a loss-sharing program with the U.S. Treasury on $300 billion of loans and securities backed by residential and commercial real estate, consumer loans, and other assets. Citi issued $7 billion in preferred stock to the Treasury and the Federal Deposit Insurance Corporation in exchange for the loss-sharing agreement. In February 2009, Citi announced that it would issue common stock in exchange for certain third-party-owned preferred securities, to increase its tangible common equity without any additional U.S. government investment. As part of this exchange, $25 billion of the U.S. government's preferred shares were converted to common shares as well. In January 2009, Citi announced a reorganization that would allow it to focus on its core banking franchise while reducing non-core assets over time. The following month, chief executive Vikram Pandit appeared before the U.S. House Financial Services Committee with seven other CEOs of companies that had received TARP funds. Following public criticism of large Wall Street remuneration packages, he made his own position clear. He intended to take a mere $1 a year as salary and no bonus until Citi returned to profitability. "I get the new reality and I will make sure Citi gets it as well," he told the committee. At the end of 2009, Citi raised $20.5 billion in public equity, used the proceeds to repay the $20 billion of preferred shares owned by the U.S. Treasury, and terminated its loss-sharing agreement at the same time. By the end of 2010, the U.S. government had sold all of its common shares in Citi. In total, the U.S. Treasury netted a cumulative profit for taxpayers of $12 billion as a result of its investment in Citi. "We will always be grateful to the American people for their crucial support during the crisis," Pandit said. In March 2010, Pandit explained that Citi had become "a fundamentally different company than it was two years ago." Indeed, it had re-emerged as one of the best-capitalized major banks in the United States.

Take off in Malaysia
A leading Malaysian company takes part, with bank backing, in the growth of international air traffic, while an airport operator benefits from Islamic banking services
Air Asia X was launched in 2007 as the long-haul affiliate of Air Asia, the largest low-cost carrier in Asia. Commencing operations in 1996, Air Asia flies to over 400 destinations in some 25 countries. Citi initially provided the Malaysian company with cash management solutions and merchant-acquiring services for internet sales, before moving into aircraft financing. "We've worked very closely with Citi on a very critical aircraft financing solution," said Azran Osman Rani, the company's chief executive officer, in 2011. "We took delivery of two of our A-330 planes on the back of a $147-million financing package based on an export credit agency facility that was provided by Citi," Azran said. "Without this facility, it would have really hampered our growth. So it was mission-critical and Citi delivered. They had the network, the global expertise and the specific industry knowledge to put together what my board basically said was an industry-leading finance solution." On top of the $147 million, there was another $25-million working-capital loan that Azran described as "truly groundbreaking" in the context of what had been offered previously in the sector. "We've been together through this tumultuous roller coaster of an expansion drive during what's probably been the most fascinating growth landscape for the aviation industry," he said. "The relationship is now cemented. I look forward to working very closely in the future as we keep taking this airline throughout the rest of the world."

Earthquake in Peru
On August 15, 2007, a very severe earthquake, magnitude 8.0, shook southern Peru, killing more than 500 people. More than 1,300 people were injured and almost 60,000 houses destroyed. In response, the Citi Foundation teamed up with the Washington-based Pan American Development Foundation to donate emergency kits. Apart from food, these included tents, blankets, plastic roofing, water purifiers, and construction materials. 

Acquiring Corus
A defining moment for the Tata Group, as well as for Citi's relationship with the company, came in 2007, when Tata Steel announced the takeover of Corus Group PLC, the Britain-based global steelmaker. This was a £7.0 billion ($13 billion) transaction, the largest ever by an Indian company. The resulting entity was the world's sixth-largest steel company, with a total annual capacity of 28 million tonnes. Citi co-underwrote the non-recourse debt of about £3.7 billion ($6.65 billion), the largest-ever for an Asian sponsor, and a huge commitment that saved the group much time, effort, and cost. The transaction was launched in 2007 and, despite the adverse market conditions, sub-underwriting was successfully completed in September. The facilities were syndicated to banks and institutional investors in the United States, Britain, continental Europe, and Asia. 

Two iconic automobile brands
In 2008, Tata Motors announced the acquisition of Jaguar Land Rover from Ford Motor Co. for $2.3 billion. Citi was the co-lead mergers-and-acquisitions advisor as well as co-lead underwriter for the acquisition financing. The crisis in the global financial markets towards the end of 2008 posed a challenge for Tata Motors. About $1.9 billion of the $3 billion acquisition bridge loan fell due in May 2009. Citi stepped in as structuring and coordinating advisor to Tata Motors. Citi was aware of the difficulty of raising the entire amount from the international bank markets, but saw an opportunity in the local currency markets. These had greater liquidity following recent Indian government and Reserve Bank of India stimulus measures. Citi proposed a dual execution in parallel in both Indian rupees and U.S. dollars, in order to maximize the investor base and liquidity pools. The rupee debentures were credit-enhanced via a guarantee from the State Bank of India. The debenture attracted high demand, and Tata Motors was able to increase the deal size from about $650 million to $840 million. The U.S. dollar facility was restructured and extended for a lower amount of $1.0 billion and also included credit enhancements; it was ultimately oversubscribed, with two new lenders joining the transaction.

Ensuring access for all
Citi and the Citi Foundation promote financial inclusion working with partners worldwide
An organization such as Citi is interconnected with society in many ways. As Citi's CEO Vikram Pandit put it, "Part of the mission of any financial institution should be to promote financial inclusion. The social and economic benefits of reaching the unbanked are enormous: greater financial security and economic opportunity for low-income people and expanding markets and prosperity for the entire world." Access to, and understanding of, savings, loans, and other services brings economic empowerment, which in turn helps create vibrant communities. Citi promotes access to financial services and the building of financial capability through Citi Microfinance, which serves more than 100 microfinance institutions, networks, and investors as clients in over 40 countries. Charitable support is provided by the Citi Foundation. In 2010, the nonprofit Citi Foundation donated $67.9 million, of which 41 percent went to recipients in some 40 countries outside the United States. However, in its work to support the economic empowerment and financial inclusion of low-to moderate-income people in communities where Citi operates, the Foundation does more than donate money. The Foundation calls this a "More-than- Philanthropy" approach. It brings scale and expertise by working collaboratively with a range of Citi partners to design and test innovation, and to support leadership and knowledge-building. Among many other activities, the Foundation supports the Citi Microentrepreneurship Awards, stemming from an earlier collaboration with the United Nations. The program has expanded to 28 countries on five continents. The awards promote awareness of microfinance as a means of alleviating poverty. The grants that come with them provide additional backing to those who have borrowed as little as $12, helping to transform poverty into possibility. The award-winners show determination in many forms. For example, one recipient lives in Bangladesh, where the sport of cricket is a national passion. The recipient comes from a village that is without electricity and accessible only by boat. She decided to start a business making cricket bats. With the aid of a microloan from Padakhep Manabik Unnayan Kendra, an NGO promoting national development, by 2011, she was running a factory employing seven people, and others in the region have followed her example. The local cricket-bat industry now provides jobs for nearly 700 workers. In Morocco,another recipient s the wife of a fisherman. When her husband fell ill, she took over his role, despite the initial suspicions of her male counterparts. She became the first and only woman in Morocco to carry a fishing license. With the aid of microloans from Fondation Zakoura, she soon owned two boats, and employed up to 15 people, depending on the season.

Dulles Metrorail
In 2009, Citi served as the co-lead book running manager for the issuance of the Metropolitan Washington Airports Authority's (MWAA's) inaugural $963 million of Dulles Toll Road Revenue Bonds. The bonds, which are secured by toll revenues from the Dulles Toll Road - a 14-mile toll facility in Northern Virginia - were issued to fund an estimated $3.1 billion contribution to the landmark Dulles Metrorail Project, as of 2011 the largest transportation infrastructure project under way in the United States. The Metrorail Project is a 23-mile extension of the Washington D.C. Metrorail system which will ultimately extend Metrorail service from the District to Washington Dulles International Airport (IAD) and beyond. The Metrorail Project is being funded as part of a Public-Public Partnership between MWAA, the Commonwealth of Virginia, USDOT, Fairfax County, and Loudoun County, Virginia. The inaugural $963 million financing, in August 2009, represented the first BBB-rated transportation project financing executed in the market since the October 2008 credit crisis. Citi worked diligently with MWAA, its advisors and counsel, public and private stakeholders, investors, and the rating agencies to construct a multi-faceted, multi-tranche financial plan to be sold into an uncertain marketplace. The financing also included the first issuance of BBB-rated Build America Bonds executed after the BAB program's enactment in the American Reinvestment and Recovery Act in early 2009. It earned the National Deal of the Year and Southeast Deal of the Year awards from Bond Buyer, the municipal bond industry's daily trade newspaper. Citi also served as co-lead book-running manager on the MWAA's second Dulles Toll Road Revenue bonds financing in May 2010, totaling $342 million.

A new beginning
Towering 1,776 feet (541 meters), the new One World Trade Center, formerly known as the Freedom Tower, was conceived as a symbol of the United States' resilience, the height and the former name recalling the year when the United States was born. Due for completion in 2013, it will be one of the world's tallest buildings. Citi was selected by New York/New Jersey Port Authority to be its lead banker on the first $750 million of federally taxable consolidated bonds issued in June 2009 to fund construction at the site.

Citi deploys TARP capital to help support the U.S. economy
U.S. government investment under the Troubled Asset Relief Program came with clear conditions. Citi was obliged to expand the flow of credit to U.S. consumers and businesses on competitive terms, and to work diligently under existing programs to modify the terms of residential mortgages as appropriate to strengthen the housing market. Vikram Pandit said, "Americans from all walks of life are facing real economic hardship, and Citi must do whatever we can to help them. Our responsibility is to put TARP capital to work quickly, prudently, and transparently to support U.S. consumers, businesses and our communities during these challenging times. To this end, Citi is working in partnership with the Government to increase available lending and liquidity in the U.S. financial markets and to help put the U.S. economy back on track." TARP money could not be used for compensation or bonuses. Citi provided quarterly public reports on how it allocated TARP capital to support lending to the U.S. economy.

Citi supports American communities
Affordable housing, job creation, small-business finance, and encouraging children to save are just some of the social initiatives that deserve backing
Expanding financial inclusion in the communities where its people live and work is an important part of Citi's culture. Through Citi Community Development (CCD) and Citi Community Capital (CCC), and in partnership with nonprofit and public organizations on the local and national levels, Citi expands access to innovative financial products and services, enabling people to achieve economic empowerment, and to revitalize neighborhoods. In the United States, Citi Community Capital is an example of responsible and sustainable business practices in action. CCC has deployed more than $20 billion in loans and investments over 10 years. Each dollar is specifically designated to affordable-housing development, job creation in low-income areas, small businesses in need of capital, or the revitalization of distressed areas. In late 2009, Citi proposed an innovative and complex transaction enabling the New York City Housing Authority (NYCHA) to upgrade a large part of its housing stock. After bringing together city, state, and federal stakeholders, in March 2010, Citi was selected by NYCHA to finance a $900-million deal for the rehabilitation of 21 housing projects for 46,048 residents in 21,139 units. The Secretary of the U.S. Department of Housing and Urban Development, Shaun Donovan, pointed out that the number of units involved was equal to the whole of Chicago's public housing stock. At the announcement of the initiative, he hailed the day as "the most important ... in the preservation of public housing in the nation's history." Through CCD's expanding partnership with Grameen America, underserved entrepreneurs in New York City receive microloans, along with the opportunity to open savings accounts at Citi with enhanced electronic access, minimal or no fees, and conveniences like ATM access. As of September 2011, Citi had more than 3,000 active Grameen client accounts. In California, CCD and the City and County of San Francisco established Kindergarten to College, the nation's first universal college savings-account program. These initiatives are complemented by funding from the Citi Foundation to expand the capacity of these organizations to meet the financial inclusion needs of these communities. In Chicago, CCD and 11 local nonprofits have formed the Chicago Credit Building Coalition, to provide a secured credit card as a credit-building tool to unbanked individuals. These are just some of the ways Citi builds economic empowerment for the underserved members of society.

Hong Kong Government purchasing card
In 2009, the GTS business teamed up with the retail bank to offer a purchasing card program to the government of Hong Kong. Under the program, Citi agreed to issue cards to more than 3,000 government employees over an initial three-year period. At the time, it was the biggest purchasing card deal ever awarded to the bank by a public sector client in the Asia Pacific region. The program aimed to help the government streamline procurement and payment for minor purchases. At the same time, government vendors were expected to gain access to a larger customer base. 

A new strategy
In January 2009, in response to the challenges facing the industry, Citi announced a restructuring designed to sharpen its strategic focus. Citi's core business was named Citicorp. The goal was to focus on relationship banking for businesses and consumers. Some $860 billion of non-core assets were managed as part of a separate segment called Citi Holdings, and a team was put in place to reduce these assets in a manner that was economically rational and in the best interests of Citi's shareholders. For Citicorp, the difficult conditions demanded relentless concentration on the basics. It adopted a twofold business strategy. The Institutional Clients Group focused on serving some 5,000 priority institutional clients with global needs. Product expertise was being scaled to serve over 25,000 regional and local businesses. With its global footprint, Citi was able to offer fully integrated coverage and focused cross-marketing, backed up by product and regional teams. Another part of the strategy focused on Regional Consumer Banking's growing customer base in 150 of the world's major urban centers and in the emerging markets. With an emphasis on innovation, Citi's physical branch presence was being combined with other customer contact points such as mobile phones, the Internet, transit networks and card partnerships. Emerging from the financial crisis, Citi underwent a period of intense self-examination and reassessment. CEO Vikram Pandit was in no doubt about the overwhelming importance of certain institutional values as the bank established its direction for the future. In an announcement in January 2011, he distilled them into a set of key principles: 

Common purpose
Responsible finance 

On this basis, Citi had every confidence that it would continue to serve well the interests of corporate and consumer clients, enhancing the living standards of people around the world in developing and developed markets alike, and helping sustain the growth and stability of the world's economic markets. 

Helping children save for the future
October 2010 saw the launch of K2C, the first universal children's savings-account program in the United States. The City of San Francisco promised to open a savings account with an initial seed deposit for every kindergartner entering public school. The program was aimed at increasing college aspirations for every child, while helping families get a head start on college savings. Citibank announced plans to work with the program to create, open, and manage the accounts for approximately 1,200 children in year one, allowing parents to make deposits through their branch network, by mail, and online. Bob Annibale, global director of Citi Community Development, said, "Citi is committed to work with the City of San Francisco to … put in place what we believe is a potential national platform for other municipalities." K2C was launched initially in 18 schools, with numbers expected to double the following year and full enrollment by 2012. 

Helping small businesses develop
For small businesses operating in underprivileged communities, financing can be difficult to access. In 2010, Citi and the Citi Foundation launched the Communities at Work Fund, making capital to the tune of $200 million available to financial institutions with strong ties to underserved, hard-to-reach communities. One of the largest borrowers is IFF (formerly the Illinois Facilities Fund), based in Chicago and serving five states in the Middle West. It is the country's leading nonprofit facilities lender. Its loans have supported projects costing almost a billion dollars in all and creating 41,000 jobs. Citi and the Citi Foundation have also partnered with ACCION Texas, a nonprofit microenterprise development program that provides loans and business support to entrepreneurs - many of them from minority groups - who cannot get finance through conventional channels. Citi and the Citi Foundation's help has taken the form of philanthropic donations, volunteer support, and the leadership of the Citi Community Development team in Texas (including the chairmanship of the board of directors). Those supported by ACCION included the owner of the Sunshine Health Food Store. She started the business with just $2,300 from an income-tax rebate and her credit card. After a year, having been turned down by several banks, she went to ACCION, which was sufficiently impressed by her commitment and professionalism that they offered her a loan of $12,500. She seized the opportunity. Janie Barrera, president and CEO of ACCION Texas-Louisiana, said, "Citi is a community builder, a risk-taker and an entrepreneur. That's what we are. And so is Arga." 

Cellular revolution
In the African market, as in other regions without developed infrastructure, there is a potential game-changer: cellular communications technology. By 2011, 60-65 percent of the African population had cellular coverage, whereas only 14 percent were using conventional banking services, a ratio that becomes even more dramatic if South Africa, Egypt, and Morocco are taken out of the equation. Despite significant challenges, the future of banking in Africa may well lie in mobile banking, mobile commerce, and mobile payments. Banking by phone, to a large extent, bypasses the traditional advantages of the bricks-and-mortar branch network, bringing products and services to a huge sector of the population that has never had access to them before. In the mid-1990s, there were virtually no mobile telecommunications in Africa. By 2011, MTN, a mobile-telephone company based in South Africa, had become a $40-billion enterprise in terms of market value, spanning 21 countries in Africa and the Middle East, with 90 million clients in Nigeria alone. In the words of Citi's Africa CEO Naveed Riaz: "If we are talking about banking in Africa and the payment space in Africa, the revolution will come through mobile."

Smart banking the way forward
Redesigning banking processes around customer needs boosts business growth and brand awareness in Tokyo
Following Citi's establishment of a new relationship with a mass-transit company in Singapore, the bank's Global Ventures and Innovation unit in New York was exploring the potential for a similar tie-up in Japan. It did not materialize, but the thinking behind it led to an alternative retail strategy for boosting growth and brand awareness. Realizing that product segmentation alone was not the best basis for getting to know customers, the bank conducted research into nine segments of the retail market. It was decided that Citi could serve four segments well. These were defined as baby boomers, the prosperous, the achievers, and the up-and-coming. With the aid of psychographics and behavioral analysis, a "smart banking" experience was built around the way in which these four types of customer wanted to interact with their financial institutions. For achievers and up-and-coming people, screens and technology were important. These customers generally worked long hours and had little time for finding a branch, queuing, filling out forms, and waiting to be served. The other two segments, baby boomers and prosperous people, were more traditional, preferring greater personal engagement with knowledgeable staff. They also placed greater emphasis on physical surroundings. For the development of a new look, Citi turned to an international design company responsible for the iconic look of many notable retail stores. After an initial try-out at the City Hall MRT station branch in Singapore, the Japanese pilot branches were launched in 2010. In central Tokyo, customers were now greeted by a huge "media wall," displaying local weather, news, and financial updates, tailored to the location and time of day. Touch screens offered a wide range of services, and staff were on hand to provide assistance either in the branch or via live video conferencing. By re-engineering more than 100 transactions, Citi was also able to reduce the space taken up by the back office, with the result that branches in prime locations made greater economic sense. After the introduction of the new branches, Citi was soon ranked as top retail bank in Japan by Nihon Keizai Shimbun, the financial newspaper, as compared with 57th place in 2009. By April, 2011, Citi had rolled out 48 "smart banking" branches in 11 countries and territories. There were 21 in Taiwan. There were also 21 mini-smart-banking locations in five countries, including 14 in the Philippines and 11 in Singapore.

Bank backs battery maker in China
Chinese engineer Jason Wang started his career with a battery manufacturer in Zhuhai, the special economic zone bordering Macau. After a few years, he decided to start his own small-scale battery factory in Shenzhen, close to the border with Hong Kong, producing NiMH rechargeable batteries for brand-name companies in the domestic consumer market. Although by 2006 business was booming, Shenzhen EPT Battery Co. lacked expertise in sales, procurement, and finance. "It was a hard time for us," Wang recalled. "Citi was the first bank to provide us with support so we could expand the business. The staff from Citi also worked together with us to develop our marketing strategy and corporate structure to support our long-term growth." In 2007, however, the company was hit by soaring prices for nickel, its main raw material. At the same time, the yuan began appreciating against foreign currencies, bringing a new challenge to Chinese businesses. "Citi came up with commodity and currency hedge solutions and helped us successfully manage market uncertainties," Wang said. By 2010, the production capacity of Shenzhen EPT Battery Co. had reached 400,000 units a day, and annual sales were running at almost 200 million yuan. With industrial battery sales accounting for 60 percent of revenue, it was among the top second-tier companies and only just behind listed Chinese companies in the industry.

Structuring Islamic transactions
In the 1980s, Citi's corporate finance team in London became aware of the demand for a range of banking products that was compliant with Islamic principles, one of which is that earning interest on an investment is not allowed. In 1996, the Citi Islamic Investment Bank was set up in Bahrain. It benefited from the services of a Sharia board, peopled by reputable Islamic scholars, who would endorse banking products as acceptable from a religious viewpoint. Citi took products such as bonds, derivatives, syndicated loans, and trade finance products and converted them into Sharia-compliant instruments. Over the years, the technology was exported from the Middle East to other markets such as Malaysia, Indonesia, Pakistan, and Turkey. By 2010, Malaysian Airports Holdings Bhd (MAHB) was operating 39 airports in Malaysia and also had a presence in India, Turkey, and the Maldives. In 2010, Citi arranged an inaugural offering of 1 billion ringgit in Islamic medium-term notes for the company. The issue was oversubscribed nine times, attracting a diverse group of investors from financial institutions and asset-management companies to pension funds, insurance companies, and even some corporates. Proceeds were used for the construction of the world's biggest low-cost carrier terminal and to refinance short-term borrowings. Citi was chosen for its "global expertise and strong credentials in structuring Islamic transactions," according to Faizal Mansor, the company's chief financial officer. "Overall, we're very pleased with Citi. They have helped us to achieve superb ratings for the company. Citi's expertise allowed us to tap the capital markets at the opportune time and gain enormous support in our future as a world-class airport business."

Innovation - Bundle and Shopkick
With the explosion of social networking sites and mobile phone applications during the first decade of the 21st century, Citi decided to invest in start-up companies. Among them was, a New York-based venture with Microsoft and Morningstar, a U.S. investment research company with operations in 13 countries. Established in 2009, the company was the brainchild of Jaidev Shergill, who had been working with Citi to develop innovative business and technologies. Using anonymous data on 25 million households from Citi's card platform, Bundle offered consumers the ability to glimpse the spending behavior of others like themselves and learn from successes and mistakes. It also allowed users to keep track of their spending. By 2011, the site was getting one million visitors a month. As chief executive officer of the new company, Shergill noted that "people don't want to look at the average for the U.S. as a whole." American consumers were, however, interested in the spending habits of people from the same neighborhood, age group, income level, or household status. Citi also invested in Shopkick, a mobile phone application that rewarded shoppers simply for visiting stores or examining merchandise. Launched in 2009, Shopkick was a hit with retailers and was listed among the Wall Street Journal's top 10 applications in 2010. The challenge was to see if Shopkick's success in the retail sector could be applied to the financial sector.

A network for Africa
Citi is active across a diverse continent where new delivery technologies are opening up exciting prospects
In 1955, Citi acquired the Bank of Monrovia, whose history could be traced back to 1914. A Citi branch was established in Egypt in the same year, and another was set up in South Africa two years later. Dissatisfaction with the apartheid regime led to Citibank's temporary exit from South Africa in 1987 and a return in 1994. The bulk of the bank's African network was set up in the period from the 1970s to the 1990s. By 2011, Citi was established in 16 African countries and active in another 27. The bulk of Citi's African business had been corporate banking. For corporate and public-sector clients in Africa, one of Citi's great attractions is its global network. In 2011, Citi's Global Transaction Services (GTS) was supporting 67 payment currencies and providing access to 3,800 distribution points in Africa alone. For Citi in Africa there are opportunities for a young workforce. In 2011, most of the bank's senior employees in Nigeria were local. Even in that relatively developed country, however, there were gaps in local coverage at all levels. The more specialized the function, the greater the shortage. Advisory services on project finance require sectoral expertise in metals, mining, oil, and gas, and knowledge of commodity hedging. Citi was seeking to expand its local talent pool in all these areas and in other fields such as derivatives. Although in parts of Africa Citi faced highly variable standards of infrastructure, with patchy telecommunications links, progress over the first decade of the 21st century was dramatic. The company invested heavily in layers of controls and redundancy, in the expectation of future business growth. In its commitment to Africa, Citi is reflecting the needs of its major international clients, for whom the continent is an important part of their global business strategy.

Protecting forests and urban green areas
In April 2011, Citi's Russian subsidiary, ZAO Citibank, started planting a million trees in Russia's Far East as part of a broadleaf pine-forest recovery project in partnership with the Amur branch of the World Wildlife Fund (WWF). This number represented the number of individual clients Citi had acquired in Russia, where the retail business was launched in 2002. The saplings were planted in the Ussuriysk and Khasansky districts in the southwest Primorsky region, bordering China and North Korea. The two species selected, the Korean cedar (Pinus koraiensis) and the Manchurian fir (Abies holyphylla), are native to Russia's Far East, China, and Korea. "Forests are a part of Russia's natural heritage, and cedar forests are vital," said Zdenek Turek, president of ZAO Citibank and head of Citi in the Commonwealth of Independent States. Further east, in Singapore, Citi collaborated with the Garden City Fund, tasked to encourage investment in projects that would soften the harshness of the urban "concrete jungle." Citi launched a "Go Paperless, Plant A Tree" campaign in 2008 to encourage customers to receive electronic rather than paper statements. On average, the e-statement program saved 11 million sheets of A4 paper a year, amounting to 22,000 reams. Under the year-long campaign, Citi pledged to plant a tree for every 100 customers who enrolled. More than 100,000 signed up.

June 16, 1812 to June 16, 2012
In 2012, Citi celebrates our 200th anniversary. Our principles - common purpose, responsible finance, ingenuity and leadership - are the bridge that connects our 200-year history with the future we want to create. When these principles guide our actions, we endure and thrive. Our special anniversary provides us with an opportunity to reflect on our history and prepare for the future.