J. Luther Cleveland

J. Luther Cleveland (1891 – July 1, 1984) was an American banker who served as president, chairman and chief executive officer of the Guaranty Trust Company of New York, one of the largest commercial banks in the United States.

He began his career in Oklahoma banking, joined Guaranty Trust in 1923, became its president in 1944 and chairman and chief executive officer in 1947, and remained its leader until Guaranty's 1959 merger with J.P. Morgan & Co. He subsequently became chairman of the executive committee of the resulting Morgan Guaranty Trust Company, retiring from that office in 1960 and remaining a director until 1961.

During Cleveland's leadership, Guaranty Trust played a significant role in financing American public utilities and petroleum companies. Cleveland became known for his advice concerning petroleum and utility investments and for helping develop lending techniques in which oil-producing properties were used as security. He also participated in litigation surrounding the sale of Universal Oil Products and the establishment of the Petroleum Research Fund.

Early life and military service

Cleveland was born in Cleburne, Texas, in 1891 and attended the Eastman School of Business in Poughkeepsie, New York. He received his early banking training in Texas and Oklahoma.

During World War I, Cleveland served in the United States Army. He enlisted as a private and was eventually commissioned as an officer. He served with the Quartermaster Corps in France and was discharged as a first lieutenant.

Career

Cleveland entered banking at the age of 21 as an assistant cashier at the American National Bank of Muskogee, Oklahoma. He subsequently joined the American National Bank of Oklahoma City, where he became a vice president and director and was particularly associated with the bank's relationships with smaller country banks.

After his military service and return to banking, Guaranty Trust hired Cleveland as an assistant secretary in 1923 to help handle the bank's business in the southwestern United States. His appointment reflected the importance of correspondent relationships between large New York banks and regional institutions in the Southwest. He became a second vice president in 1925 and a vice president in January 1928. A 1940 bankers' directory listed him among Guaranty's general-banking vice presidents. Cleveland soon developed a reputation for the soundness of his advice concerning investments in petroleum companies and public utilities. He was increasingly entrusted with responsibilities extending beyond the bank's southwestern business.

In February 1940, Cleveland was transferred from the southwestern district to Guaranty's general management. The bank elected him to its board of directors on November 6, 1940. When Eugene Stetson became president in January 1941, Cleveland assumed duties that Stetson had previously performed.

President and chairman

Cleveland became president of Guaranty Trust in 1944. Photographs taken by Carl Mydans in July 1945 show Cleveland with Stetson in a Guaranty boardroom.

On Stetson's retirement in January 1947, Cleveland was elected chairman of the board and chief executive officer, while William L. Kleitz succeeded him as president. Contemporary bank statements consistently identified Cleveland as chairman during the following decade.

During Cleveland's chairmanship, Guaranty remained a major wholesale and international bank with offices in New York and Europe and extensive relationships with corporations and other banks.

Under Cleveland's leadership, Guaranty Trust played a major role among New York banks in financing the nation's public-utility and petroleum industries. The bank also helped develop lending techniques under which loans could be secured by the value and expected production of oil-producing properties. Cleveland's experience with petroleum finance also informed his participation in proceedings concerning Universal Oil Products and the Petroleum Research Fund.

Economic views

Cleveland regularly contributed year-opening assessments to the Commercial and Financial Chronicle. In the early 1950s, he argued that the economy's transition away from wartime priorities was directing a larger share of national output toward individual consumer needs. He linked durable growth to private investment, stable money, restrained public spending, and the avoidance of excessive dependence on government support.

He also favored monetary and fiscal discipline as safeguards against inflation and regarded movement toward currency convertibility and freer international trade as important to international recovery.

Petroleum Research Fund litigation

Guaranty Trust served as trustee under arrangements connected with Universal Oil Products (UOP). In 1957, Cleveland testified in proceedings over the proposed sale of UOP stock. The litigation examined whether the sale was consistent with the trustee's obligations and with the charitable purpose that became the American Chemical Society's Petroleum Research Fund.

The court ultimately approved the transaction. The decision recited a sale of 2.9 million shares at $25 per share and described the amounts transferred to the trustee after expenses and debt payments.

Creation of Morgan Guaranty

Guaranty Trust and J.P. Morgan & Co. announced on December 17, 1958, that they intended to merge. The planned institution would be called the Morgan Guaranty Trust Company of New York. Henry C. Alexander was designated chairman, Dale E. Sharp president, and Cleveland chairman of the executive committee.

The proposal received broad national coverage, in part because it combined two institutions identified with wholesale corporate banking.

The New Yorker reported on J.P. Morgan's final annual meeting as an independent institution and described Cleveland's proposed position in the combined bank. At Guaranty's January 1959 meeting, Cleveland presided while stockholders considered the merger and related financial questions.

The merger was completed in April 1959. The combined bank opened with assets exceeding $4 billion and capital funds approaching $500 million; contemporary trade press described it as New York City's third-largest bank and the fourth-largest in the United States. Cleveland served as chairman of the executive committee and remained a director.

Cleveland retired as chairman of Morgan Guaranty's executive committee on July 1, 1960, during the fiftieth year of his banking career. He nevertheless remained a member of Morgan Guaranty's board of directors until 1961.

Civic and philanthropic activities

Cleveland and his family lived in Pelham Manor, New York. In 1939, New York City officials corresponded with him about a civic undertaking associated with Mayor Fiorello La Guardia.

He was associated with educational and international-service fundraising. Surviving organizational correspondence identifies him as a national fund treasurer, and he appeared on a committee supporting grants for French students. Cleveland served for years as a trustee of Roosevelt Hospital.

He and his wife were also recorded among supporters of the Metropolitan Museum of Art. In 1966, the Clevelands donated an Abbott Handerson Thayer portrait of Emma Beach to the Bartow-Pell Mansion Museum. Westchester newspapers repeatedly recorded Cleveland and his wife as organizers or hosts for charity and debutante events, including the Westchester Cotillion.

Personal life

Cleveland was married to Elizabeth Ames Cleveland. The family lived for many years in Pelham, where Cleveland and his wife participated in civic, charitable, educational, and cultural organizations. They had three children: John L. Cleveland, Charles A. Cleveland, and Elizabeth Cleveland Lackey. Cleveland moved to Lake Wales, Florida, around 1972 and lived there for the remainder of his life.

Death

He died at his Lake Wales home on July 1, 1984, at the age of 93.