OBITUARY:Lew Preston

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The Independent Online
Lew Preston was one of the most eminent international bankers of his time. He had two careers - a long one at an American blue-blooded commercial bank, J.P. Morgan, where he rose to the top, and an all too short one as president of the World Bank in Washington.

His comfortably bulky figure and genial, courteous manner belied the toughness and resolution that made him a leader. His integrity was never in question, even though standards in the increasingly competitive banking business were slipping all around him.

A New Yorker by birth, Preston graduated from Harvard in 1951, after having done military service with the US Marine Corps, and joined J.P. Morgan in New York that year. There was no stumbling as he climbed the ladder. Head of the London office in the mid-1960s, when he helped guide Morgan into the embryonic Eurodollar market, Preston went back to headquarters as executive vice-president in charge of international banking in 1968. After a short spell as president, he became chairman and chief executive from January 1980 until he stepped down, a little short of retirement age, 10 years ago.

As a result of his time in London, Preston became an anglophile, the surest sign of which being that he brought in an Englishman, Dennis Weatherstone, as his heir at Morgan, an unusual step. Though a shy man, he was an enthusiastic participant in bankers' jamborees and took an endearing pleasure in introducing foreigners to American specialities such as the Boston Pops. Aided by his vivacious wife, Patsy, he made an excellent host when it was his turn to do the honours at international gatherings.

George Bush's choice of this East Coast patrician banker for the World Bank presidency could hardly be faulted, age apart. Preston had helped turn Morgan more and more into an investment bank and thoroughly approved of the World Bank's new focus on private sector development. Moreover, Morgan had been heavily involved in working out Third World debt strategies in the 1980s, in which Preston himself had played a steadying part and won respect in many of the debtor countries which were among the World Bank's biggest customers.

Unfortunately, personal troubles dogged the earlier part of Preston's stewardship, which began in September 1991; his only son died of cancer, he himself underwent heart surgery. Then came the World Bank's 50th anniversary in 1994, which brought more soul-searching than celebration.

The leaders of the Group of Seven industrial nations had given notice that they would review the role of the World Bank and its sister institution, the International Monetary Fund, at their meeting in Halifax, Nova Scotia, which takes place this month. Preston faced a torrent of accusations that the bank was bloated, extravagant and ineffective. His rather meek response was that his institution was already heading in the direction to which responsible observers were pointing it.

Preston knew the bank had to change. He tried to reproduce Morgan's style of partnership management by creating an ''Office of the President'' with three managing directors concerned solely with policy matters. He cut out a layer in the sprawling bureaucracy, sharpened budgetary procedures and introduced cost accounting - though his stringency will barely show in the books since it was swamped by the costs of 23 new members, including the former Soviet republics, during his tenure. Best of all, he tried to break the bank's obsession with the volume, rather than the quality, of its lending. In that view, he upped expenditure on education, health, nutrition and family planning to help relieve poverty.

Preston was always more interested in getting the job done than in making headlines. But he could not make things happen at a multilateral institution as readily as at Morgan. And not being a born communicator, he found it difficult to convey a sense of vision either to the press or, more unfortunately, to his staff.

In little more than three years (ill-health forced him out early this year) Lew Preston had begun to change the World Bank's corporate culture. His impact on it may turn out to have been greater than can as yet be appreciated.

Marjorie Deane

Lewis Thompson Preston, banker: born New York City 5 August 1926; vice- president, then president, chairman and chief executive, J.P. Morgan 1968- 91; president, World Bank 1991-95; married 1959 Gladys "Patsy" Pulitzer (one son, five daughters); died Washington 4 May 1995.

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