Erik Visits an American Grave, Part 2,027

This is the grave of Melvin Traylor.

Born in 1878 in Breeding, Kentucky, Traylor grew up on a farm, working the corn and tobacco with his father Education was limited out there–the school was only open a few months a year for these rural folk. He probably had the equivalent of a sixth grade education when he was 15 years old. But he was ambitious. He decided to go to high school, which required a lot of catching up and also moving. He did so and was granted a teaching certificate. He took a job in another of these tiny rural schools, in the town of Leatherwood Creek, Kentucky, which seems an appropriate name for a town in that state. But he made so little money teaching that he worked as a clerk in a local store part-time to make ends meet.

Well, staying poor in Leatherwood Creek was not what Traylor had in mind for himself. He ended up in Hillsboro, Texas, took a job as a clerk, and decided to study for the bar, which he passed in 1901. He was successful and locally connected and people saw a future in him. He became assistant county attorney in Hill County in 1905. That was an elected position and he lost reelection. He opened his own practice, but that didn’t go very far. Ambitious and wanting more money, he moved into banking.

Well, Traylor was very good at banking, there were mergers, and he found himself carried right long and becoming a major player in American banking by the mid 1910s. In 1911, he took a position at a bank in East St. Louis, Illinois and then two years later, became VP of the Live Stock Exchange National Bank in Chicago. He was president the next year. The U.S. entered World War I. The Federal Reserve branch in Chicago selected Traylor to be their point person in selling bonds in that area. That certainly made him even more well-connected. When bankers decided to form a professional organization in 1926, Traylor became the first president of the American Bankers Association. By this time, he was in Chicago and he became president of the First Union Trust and Savings Bank in 1928, which was the nation’s largest bank by 1931. Of course, this was not a glorious time in American banking, with so many banks failing due to the horrific fiscal policies of the Republican Party in the Great Depression, as well as banks’ own greed and shoddy financial practices. But Traylor was now at the top of a very depressed profession. Still based in Chicago, he remained distant from the centers of eastern capital and politics and that was probably a good thing for his career.

Traylor’s response was to go big, create the type of financial institutions that a modern economy needed. He wanted big national and even global banks. He wanted a modern financial industry. This was not the type of guy looking backwards as so many rich people were, who wanted a return to the 19th century world without giving up any of their 20th century technologies. It’s hard to get your head around how many Americans–and the American Federation of Labor was just as bad at this as capital or southern politicians–demanded that the U.S. stay in a glorified vision of the 19th century while trying to live in the increased complexity of the 20th century. Only the New Deal would break them of that, often against their will, and force them to confront the modern complex world. Bankers were often as big a problem here as anyone else.

Traylor was different. He was someone thinking through what would become the New Deal. In fact, there was even some talk about Traylor himself being the Democratic nominee that year. He was pushing for an early version of what became the World Bank much later and in 1931 had been an American representative in creating the Bank of International Settlements. What gave Traylor so much credibility is that he was one of the only people to have called out shoddy financial practices in the 20s, when the money was coming in hand over foot but without any solid basis. So he blamed the American financial community for the Depression at the same time that most of those folks were pointing their fingers at everyone else. His own bank remained solid and successful. There had been a run on his bank too, but he was able to stop and convince those who had deposited money that it was safe. Things were so bad in Chicago that the city had stopped paying its school teachers and Traylor managed to get the city to pay them.

Traylor was a big supporter of the Reconstruction Finance Corporation, created near the end of the Hoover administration as a way too late way to provide emergency government loans to big business. The RFC was one of these precursors to the New Deal enacted with great reluctance at the end of the Hoover years after the president and his vile Secretary of the Treasury Andrew Mellon’s advice that communities should support themselves, that this was a natural cycle of business, and that government had no major role in solving the financial crisis had led to utter and complete disaster for three years.

Traylor had a vision for the American economy, which he gave in 1926, stating, “This, then, is my hope for our future-that we may be rich without forgetting to be righteous; that we may be powerful without being offensively proud; that we may be nationally-minded without being narrow-minded; and, finally, that we may live in a world of fact without surrendering our faith.” This can be read as some right-wing vision and of course he was a giant banker, so he was hardly a progressive, but some of this is also “hold the greed in check folks,” which of course the rest of the banking community did not do.

Traylor was about having a good time too. He was president of the American Golf Association for awhile as well.

I don’t really know how close Franklin Delano Roosevelt and Traylor were. FDR and the New Deal was pretty heavily pro-big business; criticisms from small business that the New Deal was effectively pro-monopoly were not without legitimacy and the popular idea of the New Deal makes it seem more pro-worker than it actually was. There were plenty of banker types in the early New Deal, but Traylor was not one of them. He was working on drought relief issues, mostly in Illinois but to some extent nationally, when he came down with pneumonia, He died in 1934, at the age of 55.

Melvin Traylor is buried in Graceland Cemetery, Chicago, Illinois.

If you would like this series to visit other American bankers, you can donate to cover the required expenses here. Herman Natwick is in Sioux Falls, South Dakota and Walter Watson is in The Bronx. Previous posts in this series are archived here and here.