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Confronting DeclineThe Political Economy of Deindustrialization in Twentieth-Century New England$

David Koistinen

Print publication date: 2013

Print ISBN-13: 9780813049076

Published to Florida Scholarship Online: May 2014

DOI: 10.5744/florida/9780813049076.001.0001

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(p.245) Appendix 3 A Contemporary Account of Spinoff Banking at the First National Bank of Boston

(p.245) Appendix 3 A Contemporary Account of Spinoff Banking at the First National Bank of Boston

Confronting Decline
University Press of Florida

The following article appeared in a Boston newspaper in 1960.

‘Total Banking’ Concept Created by First National for Research

Research-based businesses in the broad field of electronics, metals, chemicals, atomics, and nucleonics cannot be properly serviced with old-line banking concepts. This was the conclusion reached by the management of The First National Bank of Boston some years ago, when the infant industries started sprouting along Route 128.

Thoroughly aware of the potential importance of these highly specialized businesses to the future of the region, The First evolved a new concept to handle their needs, which it calls “to[t]al banking.” To carry it out, the Bank established a separate group to concentrate on the particular needs of research-based businesses.

“The relative unfamiliarity of these concerns with the business problems of small companies …,” says Lloyd Brace, chairman of the bank’s board, “was balanced by an equal degree of unfamiliarity on our part, not only with the type of help they would need but also with the complexities of their products and processes. We still have a long way to go on the latter,” Brace adds with a wry smile, “but as a result of our early start and the concentration of our special service group, we feel we have today a working knowledge of the needs of such companies and a sound program for helping meet them.”

Briefly, the bank stands ready to assist a research-based company almost from the moment of its conception. It is often asked to suggest legal and audit counsel. The scientific-minded management may also seek help in locating personnel trained in the functions of finance, production and marketing. As the situation develops, the bank may be able (p.246) to arrange introductions to other concerns with similar interests, to the benefit of both parties. And the bank’s extensive files and nationwide correspondent network provide a ready source of credit information.

“Our interest in new companies is well known,” says William Raye, vice president in charge of the special group (known internally as the space men) handling the financing of research-based companies. “As a result we frequently open the door to sources of venture capital, and once the firm gets on its feet, the bank can assist in more direct ways.

“In a number of situations, unsecured loans, accounts receivable financing and V-loan financing have all been made available to the same company within a period of a very few years, as changing conditions and improving financial status have indicated. In other words, we try to bring our knowledge and experience to bear across the whole financing spectrum.”

The technically oriented companies of the Boston area also show an unusual interest in international operations…. Here again, The First contributes to total financial service through its extensive International Division. Research-minded customers can be introduced to their counterparts overseas, making possible the exchange of business leads, as well as engineering, production and research information. Arranging suitable overseas banking connections is another important service of this division.

Assisting smaller businesses is nothing new to The First. “By starting with them early and working right along with them, we feel we have been able to play a real part in their growth over the years,” says Roger Damon, since last October the bank’s president. “What sets these technical growth outfits apart from other smaller businesses is that the almost insatiable demands of industry and defense on their services preclude normal deliberate growth.”

Pointing up the bank’s conviction that these research-based companies are the pace-setters of the future, Mr. Damon concludes: “Any officer of this bank is authorized to make a loan … but as far as researchbased companies are concerned, no loan is refused until it has been carefully reviewed by the group specializing in this field.”

Source: Boston Sunday Herald, June 5, 1960, “First Annual Electronics Review,” 10.