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THIS INTERVIEW IS RESTRICTED AND REQUIRES THE INTERVIEWEE'S WRITTEN PERMISSION FOR ACCESS. THIS COPY PROVIDED FOR INTERNAL USE ONLY TO MS. KATHLEEN COLLINS, ARCHIVIST, BANK OF AMERICA CORPORATION

The Southern Oral History Program (SOHP) at the University of North Carolina at Chapel Hill

Transcript of Interview:

Mr. Hugh L. McColl, Jr. Chief Executive Officer and Chairman, Bank of America Corporation Bank of America Corporate Center, Charlotte, North Carolina June 14, 1999

Interviewee: Joseph Mosnier SOHP Series: "The North Carolina Business History Project"

Note: See also the second session with Mr. McColl recorded July 23, 1999, included within the same series. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series

Page 1 of38

JOE MOSNIER: Mr. Hugh L. McColl, Jr. the Chief Executive Officer and Chairman of Bank of

America Corporation in the Bank America Building in Charlotte, North Carolina on Monday, June 14,

1999. My name is Joe Mosnier of the Southern Oral History Program in the History Department at the

University of North Carolina at Chapel Hill. This interview is being conducted for our series entitled,

North Carolina Business History. The date is June 14, 1999 so the cassette number is therefore 6.14.99-

HM. Thank you very much for sitting down with us for this session. Let me start with just a couple of questions looking back to the kind of perspective and values you brought with you because one of the things that I want to explore is the reasons why and the ways in which your views have evolved and shifted over time on many fronts as they appear from the record to have done. Let me start with a sense of why was college not so particularly engaging for you?

HUGH MCCOLL, JR.: Well truthfully I found it quite easy to make Cs and do nothing.

Secondly, well secondly, I would say that being in the Naval ROTC limited the menu of electives we could take. Naval Science took up most of the electives, and so I was in the core courses almost the entire time I was at the university. That is, taking the basic required courses in General College, I think they called it at the time, and then again in business school. In looking back on it, in business school is quite limiting in its curriculum, and so I had no chance to broaden my education particularly until about my senior year at which time I didn't particularly care. Arguably I didn't know what I wanted to do particularly. Our lives were proscribed. We knew that we were going in the military, and that's about it.

JM: Why the choice-?

HM: I had no academic aspirations.

JM: Why the ROTC choice?

HM: Because at that time, we had universal military training. You either had to go in the

Reserves and meet weekly or monthly really either in the Army Reserve, the Navy Reserve, or the Air

Force Reserve. The platoon leaders PLC program in the Marines, or I decided to opt for Naval ROTC. I guess romantically thinking the Navy was better. One of my cousins, Duncan McColl who is still living a man whom I admired had been a Naval officer during the Second World War. I guess, sort of all of the

above. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 2 of38

JM: Tell me about, tell me in particular about what sort of came into vision by virtue of the trip to

Europe you made after leaving the Marine Corp. Was that an especially significant trip?

HM: Well, it was significant in that I met my wife here in a train station in Charlotte, traveled with her for whatever eleven or twelve weeks, came home, and within two months married her. So first it was significant in that sense. I know Europe opened up a lot of vistas that I hadn't seen. In the Marine

Corp we basically saw the Mediterranean, sort of outline of North Africa, and the Caribbean. So I had not been to any really big cities prior to going on this trip. I enjoyed the big cities, the Londons, and Parises and Romes of the world and saw a whole—it put sort of meat on the bones of things I had read about as a child in the novels that I had read and what have you. So I found it intriguing, interesting, probably didn't get as much out of that as I should've, retrospectively.

JM: Tell me if getting married changed you in some sort of fundamental way, changed your perspective or changed your outlook then as a young man?

HM: Well, absolutely. First I don't think I cared two hoots about what I was going to do and had been sort of blase about it prior to going to Europe. Came home and got married. Neither one of our parents wanted us to get married for the logical reasons. I was not established, had no money. My father believed that you should be able to pay for a house and everything before you got married. So it changed me in the sense that I suddenly had thrust upon me a lot of responsibility that I had not contemplated and had not really thought out. But it made me really serious about keeping my job and then trying to be successful at it.

JM: What do you think you would locate the roots of seemed to be a rather considerable intellectual flexibility, nimbleness?

HM: Well, first I think I've given my mother a great deal of credit. It's impossible for people who

didn't grow up that way to understand it. We were read to every day of our lives from the time we were

little, tiny children. Mother read to my father and to all the children and grandmother. It was a house full

of books. There was nothing to do but-there was no television. We never had a television while I was

growing up. All of our, a lot of our activities were in our minds. We lived in what you would call the

wrong side of town although we were well off. The reason was the family had always been there, and the

town had moved away from-as towns do. Even little towns do. We're not talking a mile or two, but in Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 3 of38 those days seemed like a lot. To go play in a proper neighborhood, we'll call it, you had to get on a bike or somebody had to be brought in by their parents. So we had a lot of, we played a lot of imaginary games with imaginary friends. We also made do with the people who lived around us. They became friends and part of our pick up football and baseball games, which went on constantly, basketball. My family talked business a lot at the table, or sort of not politics, because Jane, my wife's family, grew up talking politics and social issues. We talked more about business and other maybe world affairs during the war. When I was a young person, we talked a lot about the war. I've had a lot of curiosity about Europe long before I went to Europe and since, most of my adult years, I've spent reading about the French Revolution, the

Russian Revolution, the Second World War. It was only after I was in my fifties that I began to read US

History. I guess the reason was, like all South Carolinians, the Confederate states had been glamorized out of the role, we'll say out of the role of the revolution of Francis Marion and Pinckney and all those had been, we grew up on Simm's History of South Carolina. All of the, I'd call it the heroics of the Swamp Fox, et cetera. And so I identified with that, didn't really, I'm a person who likes to win. I would never read about the Civil War because we lost. I was only read extensively about it from my fifties forward. I can't answer the question you asked.

JM: I'm wondering when you're looking back, you compare your caste of minds say to that of your contemporaries in college. Would they have been likely to say of you that you were someone who was relatively receptive to a new idea, somebody who sort of liked to kick around a new notion?

HM: I don't know that. I don't know what they would've said about me. I played a lot of poker, played a lot of basketball down at the Tin Can, and went to a lot of movies. That's fundamentally what I

did was play intramural sports, gamble and go to movies. Did very little studying. But I had a good time in that sense of the word. I wasn't so—I talk a lot. I'm very gregarious. I don't know what they would've said

about me. I was elected president of my fraternity. So that says something, whatever that means.

JM: Friends say that the significant troubles for the bank in the mid-seventies were the first real

sort of crisis period you had to witness at the bank in your-at that point.

HM: Yes. We had had a blip or two in '69 when Red Cue was still in effect. We had the Chrysler

commercial paper collapse and so forth and so on. I was relatively young and didn't understand. I

understood it more as a customer's man. I was trying to lend money and I was being told I couldn't. But Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 4 of38

'74, '75 was an earth shaking period. I was a young president; I had just become president. I don't want to misstate what the president was then. I was one of three men who reported to Mr. Storrs. But I had responsibility for a lot of the banking operation including credit in the Bond Department. So that meant funding the company, liability management. So I had a baptism of fire in '74, '75.

JM: Tell me a little bit about looking back, what you think was, what were the most important lessons or perspectives you gained. That was a point at which I guess there were at least three central crises that you had to weather in those couple of years.

HM: Well, first we had to, funding—what we learned was trying to be something we weren't.

That was we were engaged overseas. We had far too much of our dependence. We were dependent on what I call the indifferent markets, the CD market, the Eurodollar market to fund the balance sheet. The balance sheet was inordinately heavy in wholesale loans. That is in deposits placed with other banks. We were taking a lot more risk than we understood. I learned a lot about funding risk in that crisis and barely survived it. We had been advised by Salomon Brothers, our bankers, investment bankers, that we, banks, they had this view that banks didn't need but fifty percent of backup lines of credit to support their

commercial paper. That turned out to be at least fifty percent wrong. In other words, we could've used one hundred and twenty five percent, or a hundred and fifty percent. That's what precipitated the crisis. In

other words, the banking industry stood the test. No other markets did. For the non-bank subsidiaries who were dependent on external financing, commercial paper, et cetera, it was a desperate touch and go there

for a while, a very desperate touch and go. I guess retrospectively, I learned a lot out of it. One, I learned people don't always do what they say they're going to do. Chemical Bank had sent us a clock to celebrate

fifty years of doing business with us. Then, when the time came to call on the line of credit that backed up

our paper, they reneged on it or in effect wanted to redeal it. We'd been paying for this for a number of

years, this line for a number of years, and when it came time to use it, it wasn't necessarily there. You

found out who your friends were and who your enemies were, none of whom I've forgotten in these thirty

years since or twenty-five years since. I learned that there's a racecar, people that live around NASCAR

understand the terminology called drafting. In what you learned is that there are people that draft as well as

automobiles. When everything's going hot and blowing and going, there are people that go along for the

ride, and they get sucked up in the organization without the real capability of handling tough times. What Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 5 of38 that really taught us, that crisis, was who could really be counted on and who couldn't. Both with the customer and with our own people. So we learned a lot about that. There are a lot of little things like little sayings like, 'When the going gets tough; the tough get going.' There's a lot of damned truth to that. We had the survival of the fittest. The strong stayed. The weak left. That helped the company coming out of the '76 period, '74, '75, '76 period because we had stronger, more experienced, tougher officers.

JM: Did you learn things about yourself, in particular?

HM: Yeah. I guess I learned that that I'd made mistakes a lot of them.

JM: Did you take any feeling of personal responsibility for having the '72, '73 run-in that kind of got you in that pinch?

HM: Well, I don't think that anybody's ever talked about this a great deal. But in 1973, we were pushing to have-Mr. Reese was retiring. We'd had, before '73 through '72, we'd had like thirty, maybe, twenty-eight, twenty-nine straight quarters of up earning, maybe more, maybe thirty-two, thirty-two. We had—we were trying to make 1973 a great year. We pushed a lot of programs that were, we had a program called, 'Your name is your collateral' in the consumer bank. That turned out to be exactly correct. Your name wasn't collateral. We lost money from almost day one. I made the point, we were highly dependent on funding from external markets, and retrospectively we should've been pulling back from the market instead of driving into it at that time. I was part of that. We felt we could walk on water. We were arrogant beyond belief. We had, we had a twenty-six P/E in 1976; we sold stock at twenty-six times earnings. We were the first bank ever to have a secondary offering of its common stock. We were actually the first bank to have issuance of long term debt, bank holding company. We did a lot of first. We really thought we could walk on water. None of our mentors had suggested otherwise. So we got humbled a hell of a lot by it. I found myself petrified with some of our responsibilities. Tom Storrs turned out to be a great pillar of strength during that period. He remained calm and cool and semi-detached, which is hard to

do. He wasn't detached at all, but he maintained a stiff upper lip. We dealt with the problems, and they

were daily. Daily, it was a daily survival exercise. But, I—it reinforced something I've always believed,

which is when in doubt attack, and we attacked. We went out on the road and raised the money we had to

have and we survived. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 6 of38

JM: This is a serious question so give it a chance here. That success, surviving that '74, 75 bridge, how much of it was, if you can proportion responsibility for the good fortune that emerged, how much sheer hard work and how much just plain flat good fortune?

HM: I would say eighty-five percent of it was just hard work. The good fortune was that we didn't go down. We dodged a bullet. One of those pieces of good fortune, which I've written about a lot was that England doesn't celebrate the Fourth of July. They were open and we were closed, and we had a huge amount of debt coming at us on the 5th that we couldn't cover. We literally would've been bankrupt on the 5th. A guy named Bernie Furlonger, our dollar trader, whom we'd acquired from the Bank of

America, I might add as an aside, raised the money in the UK and saw us through, I would say, the very nadir of the crisis. The very bottom or the height of the crisis, saw us through. That you could argue is luck that the crisis came on the Fourth of July. The crisis came where we had-now it's not luck that we went under. We had gone there and gotten ourselves established there. If we'd been depending on a

Cayman branch to get that money, it wouldn't have happened. It only because of Bemie's connections and the money markets and in other words, that's why that happened. He'd been a dealer for a long time. He had friends, people paid off. Interesting enough, other people helped us like Manufacturers Hanover and

Bank of America. I still remember Mr. Medberry, Chauncey Medberry, I don't know whether he was

Chairman or Vice-Chairman. He doubled our Federal funds line from twenty-five million to fifty million while some banks were canceling theirs or going to-I might tell you, I own a lot of those banks now. But most of it was hard work. Most of it was, we took a group of men who looking back on it were relatively young and broke them into teams and teamed them with some key lawyers here in the city. We took each

of the big problem credits, and we worked them out. And we worked at them around the clock. What I

learned there was my boss, Tom Storrs who was CEO, allowed us, we had carte blanc authority to do

anything we wanted to do. We never had, we could go into a transaction, a deal, and we spoke for the

company. In other words, each of my men did. I had a team about eight, ten, twelve people, many of

whom went way up in the company later, Buddy Kemp who was president and died, Bill Vandiver who is

now Chairman of Credit Policy Company, risk management company. In other words people made, it's

like making your bones. They earned their spurs in that war. It was a, Jim Berry who had been a, a guy

from Oklahoma, who had been a Caterpillar dealer came over here and had gotten in the business. Jim Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 7 of38 turned out to be, no one would accuse him of being erudite, but he was a tough hombre in a business deal.

He and Kemp ran most of the teams. They ran my two biggest teams. We broke it into sub-teams. But that was sheer hard work and the delegation of authority. Everybody had the ability to deal at the table.

That helped us a lot.

JM: Let me turn to another matter. The regulatory regime is one that you've had strong views about for a long time as you've tried to put a vision together of where you want to take the bank and banking generally. You've been very active in trying to influence and shape that regime and environment.

I'm interested in how kind of first principles as you're trying to go about trying to have influence in the

regulatory regime.

HM: Well, classically everybody tried to work through American Bankers, Reserve City Bankers

et cetera. Both of my two predecessors, that is Addison Reese the first chairman of this company the first

CEO of this company and Tom Storrs, both were chairmen of the Reserve City Bankers back when it was a

four hundred bankers from the hundred largest banks or the forty or fifty largest banks but only about four

hundred people in total. They worked actively to influence thinking there. Our company was, there's

always been two things and some of my associates wouldn't like me saying. This but I admired Citicorp

because Citicorp always did their own thing. Walter Wriston did his own thing. We sort of did our own

thing. We always were outliers if that makes any sense. We've been a maverick company even under the

leadership of more patrician and more intellectual management than me. In other words, Mr. Reese

certainly was an awesome person. Mr. Storrs was brilliant much more normal than me. Well, I don't

know, (sound lapse) more formal. But always we've been outliers. But tended to work directly with the

regulators. I don't know what other people do so I can't compare it. We built relationships with the people

that made decisions inside the regulatory body like the head of Banking Examinations and there's some

other word in the Fed, the person that made decisions about mergers. So we would work very tightly with

the staffs inside both controllers offices and primarily the Fed. We have had one lobbyist, a guy named

Mark Leggett, who single-handedly has won many victories for us. We tend to lobby, support his efforts

by him directing us where to go inside the Senate, the House, the Administration or the. We have always

paddled our own canoe. If we could, we worked with the other bankers, but usually our interests lay

outside of theirs. The best example of that would be interstate banking. None of them gave a damn about Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 8 of38 it until we got into Florida by ourselves. Then, we had been responding. Well, we'd been making pitches to everybody and everybody'd been telling us to go get lost. Once they saw us buying up banks, and they saw us growing exponentially everybody said, 'Wait a minute. We need to have this.' So that's when the

Southeast Bank Compact was put in place, which allowed us to grow without being overrun by the Texans or the Yankees. Later it became our Berlin Wall, and we had to tear it down. We did that through lobbying for the Interstate Banking Bill where we had some help but not a lot, five or six banks. Some of the support was lukewarm; some of it was strong. Always think that Fleet was strongly with us and maybe Wells-

Fargo. Bank America was sort of wishy-washy. Norwest was in there and not in there. It came and went.

BancOne, I don't know, they did not agree with our philosophy of doing business. One of the things that really mattered the most was getting the Interstate Branching law. People don't understand versus interstate banking. Interstate banking allowed you to have a holding company that owned banks and holding companies in other states. But we wanted to branch across state lines. I think that we had, modestly as I know how to say it, had more to do with that than anybody by some staggering margin. You could argue that we won that battle with the Clinton Administration, and they gave us the help we needed. Now I have a little bit of background material I had prepared by Tom Storrs just to get his remembrance, some of it.

And I've lost the papers. But I just thought I'd leave that with you. But basically we've gone it alone almost always. We think that that has paid off for us because we articulate our position. If you had to characterize our position, it's always pro-competitive not anti anything. We're always for things not against things. So we would not join with the industry in being against letting savings and loans have this power or somebody have this. Our goal was to have all the power in the world and not, don't mind who competes with us. That's still our attitude.

JM: How was your relationship over time with Alan Greenspan?

HM: Well, I have been a person that has never gone to the top. You would say that among all of my peers in the industry that I spend the least amount of time rubbing shoulders with important people in our industry. My earliest remembrance of speaking to Dr. Greenspan was when we took over Texas in

1988. I called him because the New York Clearinghouse was trying to not cooperate with—the bank was

eighty percent, no seventy percent owned by the FDIC and twenty percent owned by us, the Texas bank.

The people in New York took the position that since NCNB was a member of the Clearinghouse that Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 9 of38 nobody could have two seats at the clearinghouse and told us they were going to throw out First Republica, which was now NCNB Texas. I called Dr. Greenspan, I remember I was down in Houston. I said, 'Dr.

Greenspan, I don't know if you know how I am but I'm Hugh McColl.' And he interrupted me and said, 'I know who you are. What's the problem?' And I outlined to him 'You know this is patently absurd. We

owe you money. First the Federal Reserve bank is asking us to repay money that's owed to you all, that you've liquefied here. We have to go into the CD market to do that. We have to have a New York Clearing

operation and we only own twenty percent of the bank. You can't-you must help us.' He said, 'Of course we can't tell them what to do up there but we can make suggestions.' Needless to say everything got

straightened out in a matter of hours. Through the, I'm sure from him to the New York Fed to the

Clearinghouse. So that was my first visit with him. I've only really had two, we've seen each other a lot of

course at meetings. But we've had only two visits other than that. I went to him some years back when I was contemplating buying Donaldson, Lufkin and Jenrette, which was then precluded by law, some aspects

of it. I wanted to talk with him about them. I went to see him and told him I had found a way around these

laws, and I wanted his blessings on acquiring it. He was interesting. He essentially said, 'Well, it's a free

country. Do what you want to do and I'm sure you'll obey the law. This is our senior counsel over here.'

In other words, he was very supportive without giving me the specific okay that I wanted. Later I ran into

him in France when he was vacationing and we had a, we spoke after dinner and then had breakfast

together. He was then with his now current wife, maybe only wife, Andrea Mitchell and had a very

pleasant visit with him. I remember distinctly him telling me this is part of growing up I guess. He really

was going for zero inflation. We have run our bank betting on zero inflation ever since, and of course he

has delivered. It has helped us a great deal. So very limited, I would say we have a pleasant arms length

relationship as a regulator and someone should.

JM: Two other questions in terms of influencing the regulatory climate. How much have you

found it necessary over time to step outside those traditional industry and other more traditional paths of

influence to be a public spokesperson on these issues? To try, have you found it necessary to try to shape

some measure of popular opinion?

HM: Yes. Well, yes. And that's something we worked hard on starting with Mr. Storrs. Mr.

Storrs put in our annual reports why there should be interstate banking. We went to the Southern Growth Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 10 of 38

Board and met with the Governors of Southern states pointing out why it would be in their interest to have interstate banking. We've campaigned hard for that for years prior, in the external market, prior to—in fact you could argue it got some groundswell for it outside of the industry in fact maybe at one point more outside than inside. We have done the same on other issues where we have not been afraid to speak out openly and candidly and unpopularly about any issue.

JM: How about your relationship with Bill Clinton? How did that come about?

HM: Well through Erskine Bowles. Well that's almost correct but not exactly correct. I met him through Erskine. I met Hillary through Marian Wright Edelman. Marian Wright Edelman is from

Bennettsville, South Carolina. My then president of my Washington bank had become involved with her in the Children's Defense League [sic]. She invited the two of us to dinner at her home one night, and I sat beside Hillary. This was in February or March of the year that they were running for office. It was after the New Hampshire primary, which of course they didn't win, and before they had started to win. I was struck by being with her that night and a number of people, very key people in Washington, that she did not talk about her husband a great deal. She talked more about children's issues. She talked about the issues that we were gathered together to discuss. I found her to be very intelligent, and I liked her a great deal

almost from the moment I met her. Later we talked a little. Marian did bring the candidate, asked me to

comment-I had just formed NationsBank so this has got to be '92. And because Marian had asked me to

comment about NationsBank and what we were doing. It was sort of like a fireside, stand-up,

extemporaneous conversation. She talked about the campaign. At that point, I didn't know where I was

going with that. I was on Perot's team at the time. Subsequently Perot pulled out of the race and called me.

I was in the middle of merger negotiations in New York, talking to Al Lerner about MNC. We were

actually in the law offices of Wachtel, Lipton when the phone rang, and it was Ross telling me he was pulling out. I had gotten a clue that that was going to happen. Shortly thereafter, it was in the summer I'm

sure, or late summer. Erskine Bowles asked me to, if I would come to a fundraiser for, come meet Bill

Clinton here. It was here in an office tower in Charlotte. I went over and met him. I had never met him

and first Hillary—it shows you how good they were, how good they are. She immediately picked up on

where we'd been together and it was like bang, 'How are you?' Dadadadada. Picked up the conversation.

It was when I first came under the Clinton magic of standing in a room of a hundred and fifty people Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 11 of 38 crowded together, two hundred packed to the gills. He has you in his eyesight and is concentrating only what you are saying not looking around to see who he can shake hands with like all the other politicians. I was very non-committal about whether I would be for him or not. I said, 'I would like to talk to further about you. I'll be candid with you I'm a one issue person on interstate banking and interstate branching and

I'd like to talk with you about that.' He said, 'I'd love to talk with you.' So we arranged to meet in Valdosta,

Georgia and I flew down to Valdosta, Georgia where he and Hillary, Tipper and Vice President Gore were on the, they were in a bus. They were coming on a road show. I got in, I never will forget, I got in there about six o'clock in the evening. It was already a hundred and ten degrees. I went over to the courthouse and sat and sat and cooled my heels. They didn't get there until nine o'clock. Later it turned out to be that's the way they operate. Mainly their bus had broken down at () somewhere. I watched them on the stump that night, and they were really good. Then I went into their trailer, their RV or whatever they had, and that was my meeting with Bill and he said, 'Sit down and talk to Hillary just a minute. I've got to talk to Al

about something.' This was the second time I'd ever talked to Hillary, and at the time I was annoyed by their idea that that no one should make over a million dollars, get paid over a million dollars you shouldn't be tax deductible. I took it up with her and it was very interesting. As smart as she is, I got a woman's

answer or I got a irrelevant answer. 'At the end of the day,' she said 'It is just too much money for anybody

to make' because I was making the point that a company that was making four million could pay their president four hundred thousand. That was ten-percent earnings and I was getting paid less than one, one- hundredth of a percent on the earnings that I was making so why did it matter to her? Later, this must have been eleven o'clock, the President said he would like to talk. We then, he said, 'We're going over to the

Holiday Inn.' He said, 'We've got a suite over there.' So we went over to the suite at the Holiday Inn in

Valdosta which consisted of a bedroom with sort of an open area into sort of sitting area. Hillary went to

bed in the, while Bill and I sat up, and they brought food to us. I don't like fried chicken, and they brought

fried chicken and all kind of just wonderful vegetables, and he ate the whole basket. He ate all the chicken

while we talked. We talked 'til three in the morning about why interstate banking was a good idea, the

mobilization of capital. And we talked about his favorite subject, which is urban development, inner city,

helping people with housing. I committed to doing all of that and he, I don't think, know he committed to

anything. He said he was prepared to, and he ultimately did support it. So that's how my relationship with Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 12 of38

Bill Clinton started. I always said it was the best thousand dollars I ever spent, which in support of him.

That's where it ended up. In this last, this last three or four years, I have not been close to the Clinton

Administration for no other reason other than we got into this lawsuit with the Department of Labor. It's very interesting. He has said that I'm the most enlightened banker in the United States. We're the people that said we believe that Affirmative Action should stay. And yet we got the Labor Department alleging that we discriminated in hiring. I couldn't stand the juxtaposition of that. So I just distanced myself from the Administration.

JM: Let me ask actually let me visit with you for a second, how much time do you have this afternoon?

HM: Four o'clock.

JM: Okay. Okay. Good enough. Let's talk about after your appointment as CEO in '83, the broad evolution of the competitive landscape in banking and how along the way-I guess what I'm interested in getting at, is along the way, how your, did you know at that time where you wanted to go because one thing that I thought was quite interesting was when Tom Storrs gave an interview, sort of valedictory, to I think

Jamison the fellow who did the series that ended up in the Southern and helped support the Covington book. He said two things. He said, 'Our bank will emerge as a super-regional, a very, very important bank in the region.' And he also said something, which you might be able to construe, acknowledge, that for the right price, the bank was for sale. So that's when you step in as CEO. I raise that as sort of the parting vision of one person and you come in the door.

HM: Well, all you have to actually understand about me is I like to win. So to me everything is a war. It's a function of, you also have to understand, I've never read a business book. One would argue I never did read any of them at Carolina. I find them less than interesting. I don't read business periodicals.

Only read books about history, war, revolution, politics, mystery, spy novels, things that exercise the mind.

I don't read business books. I mean I dance to my own drummer. I have said and I believe it to be true, that one reason that we have been a successful company is we have had a clear vision about where we wanted to go and what we wanted to do. It's started with Addison Reese. At the time his vision was

constrained by law. But he was not interested in going to the Eastern part of North Carolina. He wanted to

come into the Piedmont where the money and the people were, the industry. Subsequently, Tom Storrs had Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 13 of 38 a group do a study. We concluded, and I was not part of it, we the company concluded, I was in management getting the report, if we didn't get in North Carolina, we were a goner because we wouldn't have any size. We could never compete with the Texans or the New Yorkers or the Cahfomians. And so it was not a happenstance that we got out of this state. We sat down and figured out how to do it. It was luck you could argue that we had the loophole and found the loophole in Florida. But that isn't luck either because if you know the story about the fact that the Pittsburgh National Bank owned the Florida Trust

Company, their CEO had bought it, went to his board. They turned it down. He calls up Bill Dougherty, that part is luck that they happened to be friends form Pittsburgh, and asked him would we be interested in buying it. And Dougherty asked me and Luther Hodges who were his peers and we said, 'Sure.' We never took it to the damned board. We just bought it. So again it shows the difference in the style of company.

No one even thought about taking it to the board. The point is that even that luck was because we had been aggressive to start with. I've been asked a lot whether I really envisioned what we did and the answer is absolutely. Did I do it all one morning? Not really. We had them plan, and the same strategic planning officer has been here the whole time, Frank Gentry. And what Frank's job was was to build a model of the optimum takeover that would give—we had a very simple goal that was, we wanted to have a dominant market share in the largest and fastest growing markets. Then in the Southeast, starting with Tom you know we got into Florida in '82. But we didn't really have the Southeastern Bank Compact until 1985. So we set out to build it. We wanted to buy CNS and we wanted to buy Sovereign. We didn't know we'd get to get them both at the same time. We could not have predicted that Texas would collapse, but we were looking at Texas banks before that. I mean, I was looking into the First National Bank of Dallas and

Allied, almost had a deal with Allied Bancshares, which my board did turn down. That is my executive did he said, 'You're crazy.' And it turned out they were right. I would've been crazy. But yeah. We've been thinking about it and I've been building these sky castles which I did as a child. To be precise, I mean, I build sky castles even today about what I want to do. I think nothing cannot be done. As a result the people that work with me think that nothing cannot be done. In other words, we believe that we can

accomplish anything. It's a mindset. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 14 of 38

JM: This question pulls us kind of up against the present day. I'm tending to mostly look behind us a little bit, but let me ask you how close do you think the present day is to finding this, the right corporate model, the right page to get what you want?

HM: Well, we have we want. The issue is can we now take it where it must go. That's what we call the doing business the way our customer wants to. Meaning from where we wish to via whatever delivery channel they wish to use and deliver the same, deliver better service than we are currently delivering. The challenges though are quite different. But as far as the business mix, we're happy with it within reason. We have no strategic imperative to acquire anything. A decade from now will we be interested in acquiring a global company? Perhaps. We don't believe it is possible to be important in the world and not first be important in the United States. The same would be true with a Deutsche bank. They can't be important anywhere in the world without being important first in Germany. But that is not exactly the same because the United States is more important than any other country in the world period. Best capital markets, best economy in the world.

JM: Why did the money center banks not chase this same target?

HM: It's beyond me. Chase Manhattan bought the failed Park Bank over on the coastal Florida in the early '80s just about the time we were buying Exchange Bank, well about the time we were buying Ellis in 1983. So somewhere in '83, '84 they acquired the failed Park Bank. You asked yourself how could you possibly do that and then not exploit Florida. They have no answer to that. In other words, some division, somebody acquired it, but it didn't have any top management backing to go take it further. Chemical Bank had a fifty-percent, they had an option on buying a hundred percent of Florida National. They owned twenty percent and had an option on it. They never exercised it and ended up selling it away. Why do they do that? I'll be damned if I know. Citibank even way before the rest of us, way before the rest of us,

Citibank had visions to want to have a nationwide company. Couldn't do it because the law wouldn't let them, but went through the savings and loan route. They bought savings and loans in Miami, Chicago, Los

Angeles, and several other cities and were never able to make them work, which was an—incidentally I heard our president, Ken Lewis say the other day, if we had to do all over again, we would never have bought a single savings and loan. In other words, we haven't bought many, but we wouldn't have bought Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 15 of 38 any if with the benefit of twenty/twenty hindsight. Citi was never able to turn out. So the answer to your question is I'll be damned if I know. There were more interest in Bucharest than they were in Baltimore.

JM: One further question sort of on the current bank. Are you worried about the ten-percent deposits cap?

HM: No. But I find it annoying. I mean, in the moment it's not in the way because we don't have to do it. But we're working on that. In the current legislation, there's a-we're doing some, you know how there's always sort of behind the scenes clarification of what language means. We're redefining the denominator. We're redefining what is a deposit, and that would include credit union deposits. We're trying to get it to include mutual fund balances. So we're just going to redefine it.

JM: But if you include mutual fund balances.

HM: It's over. Yeah.

JM: Poof.

HM: Poof. The point is it was an arbitrary number picked. So arbitrary numbers can get

changed without much trouble.

JM: How about where you want the bank to go internationally. I know you, when you were up in

Chapel Hill with () and Friday, I mean with Crutchfield and Friday you talked a little bit about this.

HM: Well, I've been carrying this message around to my franchise. I think people have to, most people get confused about two words. One is international, and the other is global. What we're trying to do

is globalize those products and services where we have an advantage, a strategic advantage and retreat from

those areas where we don't. To illustrate, we have the best, without question, international payments platform for major multi-national corporations. We're getting two out of every three if not seventy percent

of every deal that comes along. Our only real dramatic competition is Citigroup because of their

worldwide operation. Chase is a distant third. There are in Hong Kong and people like that are just not in

the game. So we're building that business. We're continuing to invest in it. We're very strong in foreign

exchange; we're very strong in trade finance; we're very strong in derivative business, what we call risk

management products by customers. What we're not strong in is we have Bank of America build all these

foreign fiefdoms. They're just really independent banks operating in Spain and everywhere in the world.

JM: Can I interrupt? This is about to end. Let me just turn it over? Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 16 of 38 END OF TAPE 1, SIDE A

START OF TAPE 1, SIDE B

JM: This is the second side, side B of the first cassette with Mr. McColl.

HM: The point is that Bank of America put these banks in place, put all this management in place.

They were trying to build a platform for their payments platform. Then in effect they said we're now in

Korea pay for it or we're now in Spain pay for it. They let the manager then set off in any number of businesses where they had no advantages whatsoever putting the company at great risk or worse spend a lot

of money making none, which is basically what they do. So I've said we're going to withdraw from

indigenous lending. We're going to be a company, we're going to target or focus all of our energy on

American and foreign multi-nationals but not indigenous. We stopped using the balance sheet. We're

going to behave like an investment bank offshore not like a commercial bank and that's it. That's my

strategy. If you asked me is there anything I would buy. Yes. I would buy a big foreign, that's not correct, big offshore investment bank or a series of small offshore investment banks and cobble them together and

make a large offshore investment bank. But will I buy banks? No. Am I interested in being the fourth

largest bank in England? No. Second largest in Brazil? No. Could some day the company? Yes. Perhaps

when we get where we can't do anymore business here in the United States.

JM: Let me shift to the issue of shaping the corporate culture particularly in light of all the

acquisitions over the years and the related issue of a corporate identity. What means and mechanisms have

you found most useful over the years in crafting this culture of the bank?

HM: Well, clarity. Let me-first if you said, if you scratched the company very deep said, 'What

is the corporate culture anyway?' Almost everyone would say a it's the old NCNB culture period, and I

would agree with that. It is the NCNB culture. And said, 'How can you do that?' You've got 180,000

people, and you've got about a thousand people left that worked for NCNB, the old one. But that begs the

issue that of course the people that came from Banker's Trust of South Carolina immediately embraced the

NCNB culture. They became part of it, and the Texans became part of it. So it's been an ongoing evolving

culture, but the core of it is a culture that came out of NCNB, and it's a very straightforward culture. That

is first it's a team. It's a single team. It is not a group of banks. It's not a group of cultures. It's first a team. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 17 of 38

We trust each other. The dominant philosophy is mutual trust. If I can put meat on the bones of that, but that is the dominant thing. The third is that we treat everybody the same, and that means treat people like you'd like to be treated. We care about each other, and we care a lot about each other. We gather around our weakest warrior when they're down and gather around and help them. It's a hard working, attacking, winning sort of combination. Admittedly brooks no deviation from that. In other words, it's an optimistic attacking culture. Not let's sit over here and contemplate what we're going to do a long time type culture.

How do we spread it? Even today as large as we are, Ken Lewis and I will talk probably to 50,000 associates this year. I talked to 25,000 already this year. That's all I do. I go and I talk to, I'll be on the

West coast, in California and in Washington state end of this month and I have about five, six, seven sessions with 400 or more people, and what we're doing is taking the same message over and over and over.

It's a delegation of authority that we call doing the right thing. It means,'Hey. Do what it takes.' Forget all these rules and do what it takes to win. Where did it come from? It came from the Marine Corps. In the

Marine Corps, you put that damned green uniform on, you're a damned Marine. They don't care if you've been there thirty years or thirty days, you're a damned Marine. They don't care if you're the scion of a wealthy family from the South or whether you were sentenced to three years in jail or three years in the

Marine Corps. You're blood brothers. Now we call them blood brothers and sisters, but the facts are, it's the way it was and that's the way I run the company. And so we don't care what company you came from.

We don't care whether you're black or white, male or female, Muslim or Christian, we don't give a damn.

You're—we do care that you care that you're one of us. That's what we care about. If you want to be one of us, it's automatic. We trust you coming out of the chutes on day one. I tell everybody this. You can only prove that I shouldn't trust you because I do trust you because you're on the team. You put on our uniform, we trust you.

JM: Let me ask, you say that First Republic situation, in practice how successful were you in winning folks over this new way?

HM: Very successful. Remember we only sent twenty people from our entire company there. I'm told Citicorp turned it down because just their real estate group said they'd have to send 900 officers there.

We sent twenty total. Today there's either not one or only one person left out of that original twenty. We kept 14,500 Texans. We looked at them and said, 'Hey we can do it with them.' They appreciate that. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 18 of 38

Were we different? Yes. I mean, did we approach business differently? Yes. Did they embrace it all together on the first day? Not all together because it was really different. We do business differently. Did it work? Yes. And I've gotten letters from people who you could argue don't really like me who have written me and said, 'Thank you for what you did for me. When you all took us over, I had no pension; I had no hope; I had no money; and now I'm retiring and I've got pension money, wealth, power.' We did it/

So yes we worked like gangbusters. Is it exactly like the old NCNB culture? No. It's got a Texas tint to it, but that's okay. We've adopted some of the Texas swagger, and we attached some of our already existing

Eastern Southern swagger. But that's actually one where we indoctrinated them so much that we don't have anybody out there from old NCNB. Nobody.

JM: Pragmatically speaking is it difficult to make assessments of upper level management in terms of how well they're coming over to this new model?

HM: No. Either you come or you don't. It doesn't take me five minutes. We have this little—I used it in the formation of NationsBank-e analogy that we had a train pulling out of the station on the first day of the year. It wasn't going to have an NCNB car, and it wasn't going to have a CNS car, and it wasn't going to have a Sovran car. It was going to have one car, a NationsBank and you either get on the train or not. But the train wasn't coming back through the station. We still have that sort of analogy. You either get on or you get off. We give people a chance, but the higher up you are and the more money you get paid, the less time you're given to get on the team. What does that mean? It means saying what you believe, believing what you say and doing what you said you were going to do. That's what trust is all

about. You tell me you're going to do something that means you're going to do it. I forget it. You've told me. I trust you. Then if you prove to me that I can't then you're going to be replace. Quickly, I might add.

JM: Let me shift to what is sort of identified on your fax as section two here, the broad issue of

leadership of a modern global banking corporation. You mentioned earlier and I was very interested to

hear you say that you don't read trade press; you don't read business journals.

HM: I would never read any of them if people didn't send me articles to read. I've got thousands

of people, that's all they read.

JM: You mentioned that you read serious stuff. You read history; you read serious fiction; you

read other fun fiction. Are there other, do you have a conscious strategy? At some point did you have to Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 19 of 38 evolve a conscious strategy that says I need input from lots of different interesting places? I'm going to go get it.

HM: No. I don't think that-we were doing business in South Africa in '76 when the Sharpsburg happened, and we did it for another decade after that. I read everything that I could get on South Africa, mainly from the left. In other words , the right already knew what they thought because that's who we did business with. We did business with the right. And the government was the right so I only read Nadine

Gordimer and —

JM: Alan Paton-

HM: Yeah. Paton. And the guy that wrote what's his name. I loved his books. I've got four of

them. Anyway, I only read on the left, and I took Bill Vandiver and we went over and we met with Alan

Boesak and we met with the white minister, I can't remember his name, that was sort of on the left. I met

with Richards, the head of the Labor Party. In other words, I was looking for when is it you leave. And

what's at play here that the government doesn't understand. I went out and visited in the Soweto. So I take

it—I do the whole nine yards. Everywhere we do business, I try to know more about it than the people that

live there. That would be true when we went into Florida. I studied Florida history. I studied Texas

history. I studied California history, New Mexico history. I've got books everywhere. So that I understand

the people that I'm dealing with. Is there a partem? Yes. Is there a plan? No. It just, I leam about what it

is we're doing.

JM: Any individuals over the years that have been significant in providing what I might in this

conversation call non-traditional perspectives or~

HM: I don't know how to answer that. I guess everybody gets input from a lot of different places

and I listen and absorb it. Do I always remember where I got it? No. It sounds trite. I got a lot of what I

believe from my father, my grandmother, and my mother. My, one of my, the people that I read

extensively about when I was interested in his mind was Churchill about how nothing was beyond him in

terms of Machiavellian behavior. In other words, he put the interests of the British people first and

foremost, and that meant just that. It meant that it didn't matter what you had to do to preserve his country

and its independence. I liked that and I've, there are people that I've observed that I thought a lot of. In

terms of certain ideas that I've seen put forth, like I found Brzezinski a very interesting man because I Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 20 of 38 mean, he gets nothing. Nobody ever says anything nice about Brzezinski but he outlined the whole the damned reason, he outlined the fall of Russia and the Communist long before it happened. People, because

Brzezinski talked funny and had some ideas nobody liked, they didn't pay much attention. But I paid attention to it. I remember meeting John McCloy and Mr. Warburg when I was a young man as part of the

American Council on Germany. I was intrigued by their views from the Second World War and their predictions and about their goals of bringing Americans and young Germans together. It was interesting the boy that runs PNC bank and myself were part of this group and we met men that later became the head of the German government and the head of the German banks. So I've had a lot of experience like that where I've encountered people that I thought a lot of. I liked Paul Volcker a lot. I've gotten to be closer with him than I have with Dr. Greenspan, but that grew out of after he was out of the job and was investment banker. I fish with him; I talk with him; I've listened to him. So yeah. A lot of different people like that. Educators, it just sort of depends. It depends on, and see I've got things that I care about. I'm more interested in education and building homes. So there are a lot of people that I've been inspired by that do things that have nothing to do with business but everything to do with it at the end of the day.

JM: You've suggested my next question which is have you put together-it seems you have. The

answer is yes but I want details. You've put together an apparatus or a structure insight. You want people to be thinking carefully about these issues. So you employ them.

HM: Yes. I employed one, and he built the apparatus. That was Joe Martin. I think Joe Martin,

singularly, would be a someone who had a great influence on me and my thinking about my external matters. He, you mentioned people Dr. Friday. You get to know a guy like Bill Friday. You know you

leam what he think and he would be a typical person that I would be drawn inspiration from or whatever

you want to call it, ideas. But Joe Martin is really, began the building on the apparatus. We have a remarkable one here actually, and we're very focussed on issues, and you could call them global issues.

They're issues that actually impact our bottom line in a negative fashion. That is we spend money on things

that are long term in nature and hurt the bottom line in the short run. We continue to do that and will

continue to do that. That might have to do with the ecology. It really has to do with helping people and

helping our communities. But we don't try to take on every issue but we try to take on things that we can

have an effect on. I don't do anything without talking to my team that gives me advice about things like Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 21 of 38 that. My last visit of the day after you will be with Catherine Bessant who runs our Community

Development business, which is a big business with us. It grew out of CRA initially, but we just turned it into something completely different. It's a very activist division, which other banks don't have one near as large. So I pay for having this apparatus and brain trust. But I like it.

JM: I can't imagine, is it fair to say as far as you're aware, there really isn't a peer operation in corporate America?

HM: We don't think so. I'm unaware of it. I don't want to say that. There may be. There may be GE does or I don't know. But I'm unaware of it. Not at the scale and scope that we have.

JM: Have you ever experienced much criticism for spending the money on this? Do people on your board tell you it's a little too much?

HM: No. But people inside when they're getting squeezed do. Because we do squeeze. We're tough. People have questioned some of what we do. Yeah.

JM: I'm sure we'll get to some of those things. Let me ask you about, we've talked about leadership. We've talked about the Marine model that you brought forward and trust and so forth. What does it mean in particular now to lead not just a major US banking corporation but the leading US banking corporation?

HM: I like that. The is right. We call it the bank. That's what we're referred-even when the press is being critical, 'The bank does so and so.' It doesn't bother to identify us, which I like. Well, it's different I'll admit. All of us, I've made the point, we've been given hyperbole all of our lives. It's a

Southern thing. It was particularly true with NCNB. We kind of like, we swaggered around. We were pretty arrogant people but the truth is that our reality now outpaces our view of ourselves, which is the first time in forty years that's ever happened. We're having to catch up with who we are and the affect we have when we say something casually or do anything. So it devolves to us I think. We have a great deal of responsibility in the country and in our communities to be a leader in doing the right thing by the

communities and as an industry leader. We take it seriously. We're a little uncomfortable with it in some

funny sort of ways. It comes into clash with our maverick status, and our always sort of not caring what

our industry mates think, which we don't. And have made a science out of not caring and actually made a

fetish out of it. So we find that some of what we have done in the past makes it more difficult to lead or Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 22 of 38 whatever. I have some thought that when I retire that some of that will go away. That is the negative burden of my personality, and that we will find it easier to lead at the national level. One could jokingly but not much say that one doesn't know who to lead because the industry is consolidating so rapidly. It seems to me that one of the things that I find myself that I'm pulled in many different directions now because everybody wants us on their national committees. Used to be the Charlotte committees, then state, then regional, now people want us on things nationally. We're having to pick and chose what we get involved with. But remember I have 180,000 teammates so I have a lot of talent who have stepped up and taken on important roles across the country.

JM: You suggested something that I was curious about, the B of A deal. Has it made you less, has it constrained in any measure your ability to speak about Charlotte and the South?

HM: No. No, but we're not-not anymore than Dallas did. Okay. In other words, when we went to Texas, when you go back to the '88 takeover, we had to downplay being from North Carolina. The only time I care about it is when somebody wants to make a big deal out of it with me. This is headquarters.

This is where all the ideas were bom, right here. This is where it got directed from. This is where it happened from. This is where it's going to stay. But no. But yes. Would I go to Los Angeles and spend

all my time talking about how we do things in Charlotte? No because you could lose Charlotte a hundred

times over in Los Angeles. I have every bit as much desire, which I don't think people understand, Cathy

and all my teammates engage, and my bank presidents, we actually care about every one of our

communities. We care about making a difference in South Dallas and South Atlanta and South Los

Angeles just as much as we do over here in Northeast Charlotte. So we're more careful would be a way to

answer that question.

JM: So you have to broaden out the rhetoric a little bit depending on place?

HM: Yeah. Depending on the place. Am I proud of being a Southerner? You bet your damned

life I am. But you know, I've told people this before and I think it gets lost on people. When I grew up, I

thought of myself as a McColl and then a South Carolinian maybe and a Southerner third. After being a

Marine, I thought of myself as being an American first, a Southerner second, but always a McColl. But

really I think of myself as an American. But really go back to the '59 triple broad, I think that I like

America a lot. I'm proud of being an American and come down on the side of America no matter what the Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 23 of 38 issue is. So while I'm, I probably use being Southern a lot, I think of myself as being an American. I don't think of myself as being a North Carolinian interestingly enough because I'm not. I mean, I'm a South

Carolinian by birth. Went to Chapel Hill to school, but I don't have an obtuse overweening, I don't get up in the morning thinking I'm from North Carolina, and I'm going to put it first. I'm just as interested in

Texas and Georgia and a lot of other places and California for that matter. Do I find it easier to do business here? You bet. I like this state as a place to do business. It's a great state to do business in, great place to run a company from. So unless they do something to change my mind, we're staying here.

JM: Particular political leader that's on the leadership theme still. A particular US President or someone you really, you mentioned Churchill who kind of stands as an inspiration.

HM: Yeah. I like Churchill a lot. Retrospectively, I can't claim to know everything about it. I think Harry Truman did a good job. I think-

JM: Why Harry Truman?

HM: Because he took over in a very difficult period right there at the end of the war, and he made some tough decisions. And the thing I liked about Truman is he told it like it was. He didn't try to be different from what he was. He just said it like it was. It's heresy to say this, but I'm not an admirer of

Reagan. I thought he had a, everybody talks about what a great President, but he surrounded himself with some people that I don't think any more of than some of the other Presidents have surrounded themselves with. He did run a huge deficit. You could argue that some of the things that Nixon did and some of the things that Lyndon Johnson did were every bit as valuable for the country in the long run. I don't-I've liked Jimmy Carter since he got out of office. I like George Bush. I think George Bush did some good things when he was in office. People forget what a great job he and Jim Baker did in putting that coalition together against Kuwait. They not only got the world to come in behind them, but they got them to help pay for it. That hadn't been where I've, the President's office is not where I've gotten a lot of my

inspiration. I liked Governor Hodges here when I was a young man. I thought Governor Hodges was a

great governor, did a lot for the state. We've had some good governors in South Carolina. The governor that I admired the most recently has been the Governor of Georgia who did such a great job in driving

education down there. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 24 of 38

JM: Any, I was going to pursue that same line and ask about any particular corporate leader but you'd probably point to Reese and Storrs I suppose for good manners if for no other reason.

HM: No. They're tough as nails.

JM: No, of course.

HM: They handle themselves better in a lot of ways. I don't know. Corporate leaders, there are many successful corporate leaders. The one I've paid attention to and the ones I've thought did a good job have been different ones. Not much, I don't know how to say this. I'm a person that is very inwardly turned in his own company. I've got more-I mean, I think Jack Welch has done a good job but, I know

Jack because we're both members at Augusta but do I get inspiration from Jack? The answer is no. He gives me somebody to chase. You know what I mean? I don't know if that makes sense or not.

JM: Yeah. Yeah. Let me ask about the what we see now as the modem global corporation and it's relation particularly, I'm curious about your sense of it's the point to which it's evolved in its present relation with the state. Some people argue, of course, we now have in front of us, and I don't know if the bank is the best example actually, there are probably others that are better examples—

HM: Oil companies. Airplane companies.

JM: That may have achieved a certain measure or scope and scale of influence that say the folks who planned our political system didn't get much anticipatory thought to.

HM: First, I don't think they've seen the beginning, end of it, I mean the beginning of it. I used to think, I always joked and said I used to think that it was a figment of people's imagination that there was the military-industrial complex that ran the world until I became part of it. It is no doubt in my mind that a large number of corporations are transnational. They have their residence in certain countries. And this is more true let me say with foreigners than it is the United States. In which they only nominally have a commitment to the country of origin and are much more global players and do have influence on other

governments other than the United States government in terms of using their dollars and lobbying power to

achieve everything from drilling rights to licensees to sell their software. In other words, whatever. Their

influence is basically aimed at their interest as opposed to any individual country's interest. Here because

the huge magnitude of this country and the large number of corporations, you could not say that any small

group of corporations controls this country. Ford and General Motors are big, but they don't control the Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 25 of 38 country. GE's big, but it doesn't control the country. Bank of America is big, but it doesn't control the country. Acting in concert do they have some power? Yes. But it's interesting how often the business roundtable or whatever in favor of something that doesn't happen. So you know I mean to the degree that you think it controls the United States, it's not true. To the degree that it controls the Third World more than the Third World would like, now the answer is yes. One of the things that's happened to me in my life is it's hard to believe that I grew up in a town of 3500 people, relatively modest town. As you point out, a very modest education. I found myself a member of the Bretton Woods committee, a member of the

Trilateral Commission and a member of the International Monetary Conference et cetera. I run with the ratpack then of former Presidents and Prime Ministers, Finance Ministers, Central Bank heads, current

Central Bank heads, current bankers of the world, industrialists. That was part of the Business Roundtable.

I resigned from it. What I learned was they are in and of themselves no particularly different from anybody else you've ever met. The difference is they control vast resources. This is the point. They're not necessarily intellectually brighter or anything else. They just happen to be in charge. Now because they reinforce each other's view of that, of their own importance, they are important, but again because of the resources. You can get people to do something through this old boy system, which it's properly named.

These are basically Teutonic Anglo-Saxons you know with a few Italians and Spanish, mainly Italians thrown in and Japanese. Fundamentally have a lot more to do with things than you would think. In other words, more than the press knows. Not more than they suspect but more than they know. And I find it interesting. We're a player there. It devolves us to be a player whether we want to or not. We don't do it a lot, but we have access to that system. We're part of it because we're one of the largest banks in the world.

And banks have the privilege of furnishing the grease for the engine. Nothing happens without money so if you control money you have inordinate power. There's no question about it.

JM: The whole experience concerns you in any measure, worries you at all? Or are you relatively comfortable with what you've observed?

HM: Well, when does this go to press? I'd say the answer to that is and now I've observed things that I don't think much of. What I have not liked about myself, let's try it with me, and then wherein where

others like me are silent about issues they know they shouldn't be silent about. That can be water pollution,

it can be—I'm talking about macrolevel things where any rational person knows that isn't the right thing to Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 26 of 38 do. That overtime it's the wrong thing to do. You could argue right here in North Carolina that you had to be a damned idiot not to believe cigarettes caused cancer. In other words, this state has blindly pretended that didn't happen. So just in this, you could say in this microenvironment of North Carolina that it was inappropriate to or not politically correct to tell the truth about the cigarette business because it was quote too important for the state. Well that's a weird point of view if you think about it. It begs the question, doesn't it? Why is the tobacco business to important to tell the truth, to talk about the truth about it? I think it's the same thing as saying OJ Simpson didn't kill his wife. I don't think there's a damned bit of difference between the two issues. It's, he did and they did. So yeah. I think there are a lot of things that I wish I'd been tougher about earlier. I'm pretty tough about it now. Maybe it's because I think I'm bullet proof. I ain't bullet proof but I think I am. So yeah. I've seen a lot of things I don't like about it. But it, the

schizophrenia of American corporations, multi-nationals is they also do a lot of good. So all American

corporations are like human beings. They have weaknesses and strengths, but there's huge power in the

gigantic multi-nationals.

JM: I'm interested to draw you out a little bit on-oh one quick follow-up actually before I move

on. Campaign finance reform in this country, a good idea in the bank's view?

HM: I'm very in favor of it. I don't like soft money, and it's a policy here that we don't give it.

JM: Consider this modem global enterprise that we're talking about. The leaders of those

enterprises as we've just been mentioning are looked to for leadership of lots of sorts not just economic. I know that in talks somewhere not so long ago, you held up the shift from the church to the state, to industry

as a broad change across the last several hundred years as sort of locus for attention to these problems.

How does one go about wearing all these hats? You're asked to be someone who can prophesy on the

solution to the race relations problems, on environmental issues, on you name it?

HM: I think that's an interesting point and I haven't-I have talked to my teammates about this. I

think that you can use up your power or your attention grabbing power if you take on too many issues.

People are just like, 'Well he's just a gadfly.' I think that personally that we should try to limit those efforts

that we make to just the most important issues, first early childhood education and then secondly race

relations, thirdly housing and jobs. There are other spokespersons that are better equipped to take on other

issues. And even there you need to, you've got two choices. You either don't get out and do much and Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 27 of 38 have three or four what I call seminal speeches a year which is what we try to do. The race relations speech is one we had thought about a lot and had worked on a lot and said things that needed to be said. For everybody to cut out the whining and cut out the pretending it isn't a problem, and let's talk about it, and let's get on with it. American corporations have a lot of money but we don't have taxing power like the US government has. The things the government has to deal with that we can hit the fringe of but to try-we can be helpful, and we can try to get the public to focus on the issues and come there. But we can't by ourselves solve it. We don't have the money to do it because then we run into this, what are we doing to the shareholder? We get into this, we give one hundred million dollars a year here. That's five percent of twenty billion-dollar foundation. That's a twenty billion dollar foundation is the way to look at that. We give away a hundred million dollars a year. There are people who think we shouldn't but it's a limited number of pennies a share. So I think it's the thing to do. But go back to speaking out. I think you have to be judicious not in fear because you don't, so you don't defuse what you're hitting power on.

JM: Urn.

HM: I got asked, I get asked to do everything. I got asked last night to speak to the Medical

Society next May to talk about the state of health care in this country and what has to be done. Well, hell

I'm not an expert on that. Although I'm losing enough money in it to get to be an expert in it. It's those kinds of issues that we get asked to speak on everything.

JM: Yeah. In fact, I was going to draw you out on that very point. If you could give a quick sketch of the range that is asked of you, it would be illuminating in many ways.

HM: The range starts with being asked to go out and talk to a nursing home here and talk to local residents about what I am doing in rebuilding Charlotte, sort of on one end, or a black church down here to talk about race relations to addressing national forums on any number of subjects.

JM: Many requests a day?

HM: Oh yeah. We would probably, we could give two speeches every day if we said yes to half of what we were asked to do. In other words we are asked to do literally hundreds if not thousands. A lot of them never get here. Some of them get here. Even then all of them are referred to Public Affairs and

then we talk about what is it we want—if we think it's worth our company being represented we then look at

then if four or five other senior executives can do it rather than me. We're talking thousands. It's, every Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 28 of 38 school in the world wants me to come talk to their business school. Chapel Hill wants me up there fifteen times a year. It's an interesting problem. We operate in twenty-two states. We've got thousands of universities that we support. If you said what do you pick to do? It sort of depends where we are on some curve on any given date. So a lot of times I'll say yes to something my people wouldn't say yes to because I care about it.

JM: You've talked, given formal addresses on the whole issue of corporate civic responsibility.

Let me ask you, pull out a few themes I think maybe I haven't found in the public record anyway as much as I'm interested to know. I presume that you'd agree that banks have a particular or unique role, special obligation in their role as aggregators of capital.

HM: Yep. I think we actually have a privileged license, not a right to do business. We have a privilege to do business. And that privilege has, can accommodate, the cost of it is that we are supposed to support the community's efforts whatever the hell that is. In other words, we can't say we don't like this kind of loan if that's what the people in our community need. We have to, the size of this company now is we must be responsive to the citizenry that lives inside of our twenty-two-state franchise period, all the citizenry.

JM: Let me ask you this. Is the bank's model of commitment to the civic responsibility, is that a politics? Is that a coherent plan to achieve a particular social end? Or merely a contribution, a doing of what we can, towards what we hope will be a much broader effort?

HM: Well that's an interesting question. I'm not sure I can answer it accurately but I'll give it my shot. We have certain plans. You say political. Are we trying to shape the world? No. We think we would make more money, that our people would enjoy their lives better that is our 180,000 people and the communities they live in would be better places if we could stamp out racism and poverty. In other words,

social peace is one of our goals. Social peace means letting everybody have a piece of the action. It is true that I am far more liberal than anybody else in my position. I'll have to admit that. I'm a Democrat. I'm on the liberal side of the ticket all the time and that's sort of out of step with most bankers and with most of the big corporate customers. But it's not out of step with most of our consumers. I don't do it for either one of

those reasons; it's what I believe. I think that we each strive across the nation to support those things that

eradicate racism, bad housing, poverty and ergo crime. So we fight back in places we can make a Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 29 of 38 difference, early childhood education. We're talking about early intervention like we underwrote two schools, five million bucks to rebuild two inner city schools because the county wouldn't come up with the money, and their wasn't anybody else to do it so we got it started. There was an article yesterday in the paper about how successful they had been. So we tend to step in mainly to try to be a role model mainly to try to attract others to do the same. But we have no hidden political agenda. It is a political agenda of peace if you want to call it that. And that's not inconsistent with our corporate goals, which will take me back to Churchill. I have wanted, my goal for this company and I've said it many times, people don't understand it is to survive and prosper. We have survived and prospered. That's because that's what we set out to do. People think I have some goal to be the biggest to be this and to be that. The goal is to survive and prosper. Survival to me means that we're running things. That means that we, the corporation actually does survive and that it's leadership, and its management survives, and it's prospers and our shareholders prosper. We get to this position that you're talking about. We're now in the position in simplest terms of power and influence. So we have sought that. I would say we achieved it, but that isn't exactly the way the world works. You're only there for a day. If you've ever climbed mountains, which I have, you know you get to the top and when you're standing at the top, there's only the way down. You can't stay there at

19,000 plus feet because you won't be able to breathe. So you have to go down the other side. In order to keep from going down the other side, we have to raise the top of the mountain. We have to keep climbing.

So that's the size, that's having more to do with the world. Part of the game that we play out, and this is a remarkable company because it's been a growth company for forty damned years. Very few people can

sustain that kind of drive over forty years. But I understand it. So what we do, not unlike Churchill, is we

do what's in our interest, broadly. Like the French maybe. The French always behaved in their own

interest. They saw for instance, the French saw and the Belgians neither one saw any problem with selling weapons to both sides in the Vietnam War. I'm not so sure that the French didn't sell arms to Hanoi when

they were fighting them. The, during the Indochinese War. My point is we don't have a master plan, but

we respond in the interest of the city a better place. No having said that, the second area we respond in is

where our own people want us to go, where our teammates want us to go. Then a subset of that is what

matters most to the people in Charlotte, in Dallas, in Valdosta, Georgia, in Sacramento.

JM: And you'll back that up with money. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 30 of 38

HM: Yes.

JM: I look out the windows and I see Charlotte. It doesn't look anything like it did even five years ago let alone fifteen, twenty years ago.

HM: It's a huge change in five years.

JM: People talk about Hugh McColl building Charlotte. Sitting up here and-what's, where do you want to go? What's the model? What's a well realized, well ordered, modem city? Do you have a model? Does it go all the way back to Odell's plan?

HM: Well, I've always said the Odell plan is what's driven me. To a large degree that's true but it would be more accurate today to say that Odell's plan is what inspired me. That would be a better way to put it. I guess that each of us in our own way have things that interest us outside of our businesses or our principle professions. And this happens to be something I'm interested in. If you ask me why, I've got no damned idea except I like making a difference. I have a big imagination and I see things that can be done and I've seen in other cities. There isn't a model though. I wish there were. I look at Charleston. I look at

Baltimore particularly, and I see towns that saved their housing stock in downtown, and I wish we could've done that but we couldn't. We're really a modem American city, an old city, but a modem one who is rebuilding itself. And we're trying, each time we make a step, we're trying to do better than the step we took before because we did make mistakes, each step along the way we made mistakes. But we've learned from it, and what we hope to have is a vibrant alive city. A model for that is London and Paris and New

York and San Francisco. San Francisco's got its problems because it is not lively downtown in the business district at night. It's dead as hell. Arguably Charlotte is more exciting in the business district on a

Thursday night than San Francisco is. San Francisco is beautiful but I actually believe that Tryon Street is more exciting than Montgomery Street. I may take a member of the press who likes to talk about what a

little town this is and show him that. Prove it to him by taking him to walk on Montgomery on Thursday

night and on Tryon Thursday night here. The point is that

END OF TAPE 1, SIDE B Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 31 of 38

START OF TAPE 2, SIDE A

JM: Cassette in the Monday, June 14, 1999 interview with Mr. Hugh McColl at the Bank

America tower in Charlotte, North Carolina. I'm Joe Mosnier of the Southern Oral History Program. This is cassette 6.14.99-HM.2 for the North Carolina Business History Series. Let me pick up a few other aspects of today's ambitious city that you're trying to put together. Somebody could read some of the public statements you've made in the last couple of years and think that somewhere along the line New

Urbanism became a notion that you wanted to embrace. You talk about, you talk about Charlotte in the

'60s as being a place that was dead and twisting in the wind, and you talk about the problems of sprawl and the automobile, which is something that doesn't get a lot of attention until quite recently. Are you, do you have an essential faith in the city as a human construct, as a place for people to live?

HM: Absolutely. Hey look. All you have to do is go to Europe to see it. One of the things that you've got to give the Europeans credit for and necessity being the mother of invention. They had very little land, and food was very important. They had these small nation states. They're not very big. France is big physically but not. Germany's not. None of them are very big by American standards. They had to feed themselves. So land was very dear and precious. So what they did is have clear boundaries of where the town ended and the land and farming began. You fly into England and you still see that. We're talking centuries old area and you still see the very clear limits of the town. And the Germans went up as their population grew. They brought in guest workers and actually built council houses that went straight up, which you say wait a minute, 'Why do they have these high rises in the middle of this village over here.'

And the reason is they weren't going to take any of that land. We Americans came over here and said, 'Oh what the hell.' We've got land everywhere so we sprawled all over hell and gone. It's brought us a different kind of problem. Now they have their kind of problems. But if you go to the center of any town in Europe,

city, you find everything. You find life, everyday. People are there to drink coffee in the morning, they

shop, they work, they live, and they come down to play at night, to go to concerts or just to sit in the square

and talk. And to have intercourse of that type, I mean, social intercourse you know that's damned

interesting. And candidly in New York you see a lot of that down in Washington Square and other places

like that. You see that. You say, don't you like that? And is it really fun to live in the damned suburbs?

Or is it really fun to go to the theatre out on a highway out here and drive your car out there with who your Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 32 of 38 with maybe your wife and another couple and get back in the car and drive back home or drive. There's no

synergy to it. There's no bringing of the human beings together. I think you lose community out of that.

So yeah. I would like to make this—I have faith in cities. I believe that this one is going to get there. I use

the football team as the perfect example. Seventy thousand people come downtown. They're not from the

same socio-economic sector. Some are not from here. They're people from the suburbs, people from

downtown. They come together and they've got a commonality of interest, which is our football team, and

they stay around and drink beer together and get to know each other and it's a positive thing. The same can be said for the concerts right down stairs or coming to the museum or whatever. I believe it builds

community. So center cities have a unique role so that you can have a damned city. If you don't have a

center city, you don't actually have a city. One of the problems with St. Louis is that St. Louis isn't St.

Louis. St. Louis has got Clayton. They've got twenty-seven different municipalities in St. Louis County.

So can they do anything to make St. Louis a better place? No, because they're not economically tied

together. A great North Carolina law is a city can annex anybody next to them without their vote. That's

why at least we have a common school system, we're one city. We can make it work. It's in everybody's

interest to develop a center city as intensely as possible because it lowers the pressure to raise taxes on

other homeowners. The more value you put on dirt, the less pressure you've got on an individual

homeowner. This is a very simple concept that people either refuse to believe or don't understand or what.

It hasn't been reported on enough. But anyhow, I believe in it a lot. I've read all the books by the people,

the Joyce's, I mean Jane Jacobs or whatever all the books about cities and what people do wrong and what

you can't make happen and how mega-projects don't work. We've tried all those and a lot of them didn't

work. What we're doing now is, we've got it all together. We've got huge momentum. We have it because

of us.

JM: Are you seeing your tipping point theory proven out, do you think?

HM: You mean-

JM: When it generates enough momentum it'll be self-sustaining.

HM: We're real close. In fact, you could argue we're there. People are building things without us.

There's no incenting them, there's no incentive, there's no tax benefits. This is actually happening. Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 33 of 38

JM: Let me take you back. I remember reading from the Jamison interview you gave back in '83 up in the library at Chapel Hill. You talk about going to work here in '59 without giving a lick of thought to what the city was like. How along the way that awakened you to this whole issue of concern about the city? Just a cumulative sort of~

HM: It was seventeen years really before I did it. It was actually after I became president of the bank.

JM: Is this the Fourth Ward story?

HM: Yeah. Really the reason was I was trying to make my way in the bank. I would actually not let the people that worked for me belong to a civic club. I thought it was a complete waste of time. I went to one Jaycee meeting and thought well this is really stupid. I still think that I guess. I don't know that I think that. I guess there are people that have to organize themselves in a way that they can get organized you know to do good. And I guess they do it. Anyway, it really came about because a desire to, it may have been even as crass, although I don't think this, but it could've been that I was trying to find something

for me to do that would compete with Luther Hodges' ability to—he was in manpower development and those sorts of things. I was competing with Luther for the top although by when I got interested it was over.

JM: He departed,'77.

HM: Yeah. So I don't think that was a cause in all honesty it could've had been in my thinking but I don't really think it was. I think I thought I was ready to run the company very early and that I had

excess energy to bum off and I got interested and once I got interested hey, I got interested. I'm that way

about everything.

JM: Is there anything, I wonder down the road, you mentioned in a speech as well you think that

there are—you observed that there are relatively few business leaders that are recalled down the road by

history. Are you-?

HM: Almost none.

JM: Will your legacy be the rebuilt American city rather than the largest bank?

HM: Well, I wouldn't mind that. In fact, I would like that. I've said that to people. I think I've

had a lot of success here at the bank but I've had a lot of help. I've had a lot of success in the city. I've had Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 34 of 38 a lot of help. Things that I, it wouldn't have happened. The Transportation Center is a direct result of my

saying, 'Build the damned thing. If the city won't build it then we'll build it.' I like what we've done and wouldn't mind being remembered that way. Although I think we had a major effect on the second half of the twentieth century banking.

JM: Do you identify with the builder persona of Gianini?

HM: No. In an honest answer, I've read about Gianini. I think that he was a good man and I think he had a lot of good ideas. The old Bank of America, that is old as in two years ago, resurrected him as an icon to try to find a rallying point when they were actually essentially had a leader that had no

charisma. They tried to dig up a dead man's charisma to rally around. I'm such a competitive person that I

don't think Mr. Gianini was successful in his dream. Having said that though, he was and the government got in his way. I think the bank that I've put together is more like the bank he would've had had he lived

one hundred and fifty years or whatever than the one he had before we took them over. This chart wasn't for you but it was explaining to somebody what really happened. I was making the point that if this is

NCNB back here, there's been a continuum that went out like this in which we took over things like

C&S/Sovran and () Texas before that and Boatman's and Bamett and that continuum has happened. Here's

Bank America that took over Sea First and () Illinois and then we took them over and the point that I was making to this person that I was talking to that happened to be in charge of Public Affairs is that is the very point you were on. I was trying to make a point that anybody that wanted-they have somebody that keeps up with all the archivist. You've got to understand whose archives it is. It's really this company's archives.

All of American Trust Company is the company that survived not the Bank of America. Bank America's

name survived because we chose to take it along with everything else. Just the fact that like Chase didn't

survive either. Chemical is the one that survived. Chase's name and nothing else. I know that sounds

arrogant, but it just happens to be the truth. When people talk to me about Gianini's dream being realized.

That's just got it backwards. It's Hugh McColl and Tom Storr's and Addison Reese's dream that's being

realized. I have read about Gianini, approve of what he does, and I'm in favor of being bank that responds

to the little person on the street and in the farming communities. The bank that I acquired wasn't doing

that. They had abandoned that.

JM: Yeah. I didn't put my question well enough because what I was driving at wasn't so much- Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 35 of 38

HM: You got a Hugh McColl answer.

JM: Yeah I did. I know that's an important point. And let me say for the tape as well Mr. McColl was at a white board with a diagram of the merger history of the corporation. What I was driving at is, I think of Carnegie and the libraries. Are people going to think of McColl and the city?

HM: I don't know. I don't know if they'll think about McColl at all. I've worried about that. I've worried about it all my life that I wish I were a musician or a writer. If you asked me what I'd really like to be, I'd like to write book. I've loved novels. I love spy books. I've read them all. I wish I could be a great writer, and in some ways think I could be. But I was doomed to be whatever I am. Somehow I ended up

where I am. I've tried to make the best of it. I know that that sounds crazy. My father sent me to work in

the banking business. I got married on the way to the forum. I had to make a living. I stayed, competed

and this is what has happened. Is it what I would've chosen to do? I don't know that because I don't know

what else I would've chosen. I like building.

JM: Can the model be replicated? How dependent is the success of this, all that we see out the

window on you being in town pulling strings?

HM: Well, it's not all that dependent. I guess it's dependent on the Bank of America and First

Union and the newspaper giving a damn. Yeah. It's depending on my successor. I think the town will go

on, but it needs leadership. I think there's several people in my company already, half a dozen at least

giving great leadership. From Jim Palermo to Jim Hance to Jim Lewis, Pat Phillips, Amy Brinkley, lots of

people leading parts of the city, have taken their place in the United Way, Bill Vandiver in the United Way

and Queens College, Ed Brown and the sports. So we've got a lot of people. I'm not worried about it.

JM: Is all this effort in your understanding and conception of it a model for the state, meaning for

government. Are you trying to sort of rekindle faith in the Johnsonian and Great Society spiritof the '60s?

Are you trying to lead people back to that lost faith?

HM: Well that's an interesting question. I worry that we're so cynical, that is all of us, that people

suspect your motives. I find it remarkable that people think we do any of this to make money. This is a

company that has $625 billion worth of assets. Why would we give a damn? We don't have to do any of

this stuff. We don't make any money doing it. We do it because we want to, which is different, and

because we like making a difference. You look at that window right there and see that green land. That's Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 36 of 38 going to have houses all over it inside of two years. It's going to help fuel the growth of the city. We won't make a damned dime out of it I doubt. You could ask me the shareholder why are you doing that? My answer would be because in the long run it will be good for this company, in the long run. In the short run,

I don't know. I don't know. I think that our company could be an important model for other companies. I don't know how much people pay attention to us. We're such an upstart company that it's hard to say we're a forty-year old growth company, but we're an upstart. But we are. So I think our new image will evolve under new leadership. Then we may have a greater effect.

JM: We only have about what five or so minutes left. Certainly we could talk-

HM: You have a long list of questions.

JM: Indeed. Would you prefer maybe to call it a day and say we've covered a lot of good ground?

HM: Sure. I mean, I don't care. Do what you want to do. My point is this. I'm willing to talk to you as long as you want to whenever you want to. I started thinking about the first question you had in this book. I'd like to go back to that. You said the range of values training and protecting you held in '59 upon the beginning of banking were reflecting family upbringing, community, education, Marines et cetera. The two things that I believed that I learned from my father that I've probably not given enough credit to. One

is that when my, I was taught that when you gave your word on something that was it. That is part of this

code here about trusting each other. But I was really, it was brought on to me if when you say you'll do

something, that's what you do. That's a man's handshake. That's not native just to McColl's. It was a

Southern thing. Maybe it was an American thing at one time. That's a code I've held to. The second one is

and the remarkable thing about my father that I admired so much is he never wanted anything from any

man. I can truthfully say he coveted nothing. Arguably he was a comfortable; he had a good life. He

inherited some money. He worked hard to make money with money. He gave of himself a lot to other

people, privately without people knowing. A lot of education. Helped marriages get through. Helped

people buy their first homes out of his pocket not of the bank. That there's some of that in the mix, some of

that coming to the fore. I made a point today in a different meeting of the Urban League that it has been just as hard-that we, we talk about how far the African American has come from being a slave. That

they're great grandsons of slaves and granddaughters of slaves have made tremendous progress. This

country now can be like Ken Chenault running American Express. But we should also make the point that Mr. Hugh L. McColl Jr., June 14,1999 SOHP "North Carolina Business History" Series Page 37 of 38 the great grandsons and granddaughters of slave owners have made a lot of progress psychologically and philosophically. I made that point to them. I think it took them aback when I first said it but I am the great grandson, great great grandson of slave owners. I was a very, the worst kind of person in my early twenties and late teens in that I really didn't question the where the blacks were versus where I was. So the evolution of caring has been an evolution. It has not been something that happened one day. While I attribute various things to it, that I over-romanticize that all occurring in the Marine Corps. That didn't, it has been an evolution and getting to know people as people. And Harvey Gantt had a lot to do with that.

Getting to be friends with Harvey Gantt and respecting his intellect and his capabilities as an architect and urban planner had a lot to do with that. My point is that all of us as human beings have come a long way from our beginnings. And particularly from our history if you think about it. In other words, my African

American teammates have, but also so have their white teammates. And sometime we forget that the whites had a way to come also. If we hadn't come together, it wouldn't have worked. It hasn't worked yet because not enough people have made the transition. Interesting enough, very few of the white people in this country today are descendants of slave owners. I doubt more than one or two percent. Can't be many.

I don't know. Anyway, I look forward to talking with you.

JM: That's actually sort of the point at which I was about to think we could pick up maybe next time, the issue of race and race relations. Thank you so much.

END OF INTERVIEW