The Banking Industry Looks at Henry BY PAUL SWEENEY Mr. Speaker, Wright Patman, that gentle prophet, was my friend. He had set for himself a mission in life, the cause of what he called the plain people. . .. It did not matter to him that the bankers and the movers and shakers of the Federal Reserve Board did not agree with his cause. It never bothered him that opponents of his crusades might belittle him or use any tactic conceivable to defeat him. Wright Patman believed in his cause, and in his faith that he was right, which gave him a sense of serenity that he never lost. March 22, 1976, speech . by Congressman Henry B. Gonzalez CONGRESSMAN HENRY B. Gonzalez spoke those words nearly 13 years ago upon the death of Wright Patman, Jr., the legendary East Texas populist who was a long-time chairman of the House Banking Committee and served in Congress for 47 years. Yet, Gonzalez could just as easily have been speaking about another veteran Texas legislator: himself. Like Wright Patman, Gonzalez, who takes over as head of the House Committee on Banking, Finance, and Urban Affairs following the defeat in last November’s election of Fernand St. Germain, remains ‘ a passionate, unreconstructed populist after 27 years in Congress. The big question is whether Gonzalez will be effective as the banking committee’s chairman. In the past, when faced with tough legislative fights that he seemed bound to lose, Gonzalez tended to walk away keeping himself pure to his own convictions while allowing his opponents to fully carry the day. Banking industry leaders ask whether Gonzalez will grow into the job. Will he be able or willing to temper his kneejerk distaste for big banks and the Federal Reserve? Or will he, in the 1990s, adhere to Patman’s mentality of the 1930s? Until now, Gonzalez with his shiny blue suits and broad, flowery ties could afford to be what some see as flamboyant in his philosophy and politics because it hardly mattered. But as chairman of the Paul Sweeney is a freelance writer living in Washington, D.C. A longer version of this story originally appeared in the February issue of United States Banker. powerful House Banking Committee, he will have to make some hard choices to determine how effective he will be. In the meantime, he is admired by the old friends of Wright Patman, such as the Independent Bankers Association of America. “Gonzalez does not like big banks,” says Kenneth Guenther, executive director of the IBAA. “He is opposed to high interest rates, and he is opposed to the institution that raises interest rates the Federal Reserve.” Again and again during his tenure, Gonzalez has appeared on the floor of the House, making speeches that often lasted two or even three hours. He forcibly denounces the Federal Reserve and what he depicts as its “cruel” policies especially tight-money policies. In the late 1960s, Gonzalez first joined with then-chairman Patman in calling for a General Accounting Office audit of the Federal Reserve “you would have thought we had introduced the equivalent of an act of treason,” Gonzalez says but failed to get a hearing. Nor was he able to win a hearing for his efforts to impeach Fed Chairman Paul Volcker. Even so, in his speeches that are as vehement as he is voluble, Gonzalez attacks the Fed unrelentingly for “usurping power” and for being “not accountable.” The agency “is owned and it belongs to the private commercial banks,” Gonzalez said on August 22, 1987. “And that means the seven biggest banks in the U.S. And that in turn means that they will determine the interest rates that you pay. And that means that you will be fleeced, you will be extorted, you will be robbed.” That is strong language, indeed, from the man who now takes the helm of the committee that will have a major say over the future of the nation’s 13,000 commercial banks, over the bankrupt Federal Savings & Loan Insurance Corp., and over the very shape and configuration of the financial services industry in a period of upheaval and startling technological changes. Yet curiosity, rather than apprehension or fear, seems to be the chief reaction of business and banking interests to the sudden prominence of the 72-year-old Gonzalez who, two years ago, punched a man at a San Antonio restaurant for calling him a communist \(Gonzalez says he was acting in self-defense and that the 40-year-old man personality regularly is characterized in the press as “eccentric.” \(His own staff members frequently liken him to Don success with such improbable crusades as the impeachment of President Reagan following the Iran-Contra debacle, or abolishing nuclear power as an energy source. As one former Congressional aide says, “Too often it seems that Henry has been more interested in making speeches quoting Cicero and Homer than in twisting arms and passing legislation.” Meanwhile, banking lobbyists and the financial community’s government liaisons have until now paid scant attention to Gonzalez, whose chief duties since 1981 have been as chair of the subcommittee on housing and community development, a position he will maintain. Now, however, these groups are scrambling to acquaint themselves with “Henry B.” as he is widely known in the barrios and neighborhoods of South Texas and among friends, “I’ve had a lot of calls from all across the country, mostly from banking trade associations,” says Robert E. Harris, executive vice pfesident of the Texas Bankers Association. “They’re inquisitive. He’s basically an unknown. He’s never been a visible member of the banking committee. Not many people have been thumbing through the Congressional Record in their spare time reading Henry’s two-hour speeches.” Harris says he is touting Gonzalez to all callers as a sharp and welcome contrast to ex-chairman St. Germain, whom Harris derided as “an autocrat in every sense of the word.” Says Harris, “My attitude is that Henry Gonzalez will represent a breath of fresh air. He is going to let his committee function. That is positive for banking.” J. Denis O’Toole, legislative operations .director at the American Bankers Association, says, “Henry Gonzalez is somebody we’re just learning about.” The ABA lobbyist fastens on the fact that Gonzalez has never had close ties with the securities industry or investment bankers, which in recent years have been among the biggest Congressional enemies of the banking industry. Moreover, Gonzalez did vote in committee for the House bill reforming Glass-Steagall, a much milder version of the Senate bill that failed to make it to the House floor. O’Toole also takes 10 MAY 5, 1989
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