INTERVIEW WITH MAYOR W. W. McALLISTER
Interviewer:
Date:
Clyde W. Ellis
July 16, 1976
(Tape 2)
(July 16th, 1976, and this is Clyde W. Ellis continuing my interview
with former Mayor Walter W. McAllister, in his office on the fourh
floor of the San Antonio Savings Association Building.)
ELLIS: Well, about the Brackenridges, your mother, and Ellen Quillen
(and also the Brackenridges).
McALLISTER: Yes, my mother and Miss Brackenridge, who although she
had never married, was very interested in public affairs and especi-ally
in schools . And she early realized the importance of having a
better relationship between the school sys tem and teachers, and the
parents of the children . And as a result--I think in some other state--
a parent-teacher association had been formed. At any rate, in San
Antonio, they started what was known as the "Mothers' Clubs." And in
each school, there were organized Mothers' Clubs. My mother was the
one who di d most of the organizing. Miss Brackenridge had the idea,
and she was the one who started it, but my mother was the one who
actually went from school to school. One of my early recollections
was her interest and visits to all the different schools. As a matter
of fact, that's how I happened to get acquainted with, as we call him,
Professor Sutton, who was the father of G. J. Sutton, the Representa-tive
who just died.
ELLIS: Oh, really?
McALLISTER: Yes. He was the principal of Douglas School, and had a
very remarkable family, because Sutton had a brother who is president
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27
of the Manhattan, New York Council, which is the central New York City
governmental agency. Then one of his other brothers is a member of
the New York Supreme Court.
ELLIS: Yes . Well, that's an active black family?
McALLISTER: Yes, indeed yes . And Mr. Sutton was a nice man. I remem­ber
him, as a child I remember him favorably. He was so nice all the
time.
ELLIS: Well, that's fascinating. He was an early educator. Here.
And so then your mother became acquainted with Ellen Quillen--or Ellen
Shultz it was at that time?
McALLISTER: Yes. Ellen Shultz. Ellen was a geologist, I think was
her specialty. She had already started collecting and my mother
encouraged her. And about that time, or short l y thereafter, why,
Edwin Witte, of an old San Antonio family passed away and left a com­paratively
small amount of money, somewhere around 60 to 70 thousand
dollars, to the City of San Antonio for a museum. Ellen Shultz's col­lection
was the nucleus and that's how the Witte museum got started .
ELLIS: As far as you know, is that family fairly extinct ? That i sn 't
a name I hear any more.
McALLISTER: No, I think they are all gone. I don't know any of them
. I knew a Witte who was either nephew or a grandson of that Witte,
but that was years ago. I don't know any of them now. As a youth I
knew this one boy but I don't know any of them today.
ELLIS: But your mother continued her associations with Miss Bracken­ridge?
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McALLISTER: Yes. And I might say to you also, Miss Brackenridge had
another very distinctive start . I don't know whether they owned
property on Villita Street or not. I think the Brackenridges must
have owned the two-story brick house just west of the church there on
the south side of ViII ita Street.
ELLIS: Yes.
McALLISTER: If my memory serves me correctly, that was where Miss
Brackenridge started a school for the Negro girls, Negro children and
the girls were learning how to sew and domestic arts and Miss Artemesia
Bowden was the instructor there, and I know that she was a favorite of
Miss Brackenridge and of the Colonel also.
ELLIS: Yes.
McALLISTER: They were very generous in supporting that work and other
things that were of particular interest and benefit to our black
population.
ELLIS: Then she went on to be one of the instrumental people in the
growth of St. Phillips College.
McALLISTER: Exactly. Then out of this sewing class developed a little
more of an educational class for the Negro children, and Miss Artemesia
Bowden was the one who, you might say, was the promoter of it under
the inspiration and guidance of Miss Eleanor Brackenridge. And then
later that became St. Philip's College. When I first started in busi­ness
here--1912, I don't remember what year but I know it wasn't very
long after I'd been in business, before I was one of Miss Artemesia
Bowden's supporters.
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ELLIS: Uh-huh.
McALLISTER: And she would calIon me regularly and I'd give her five
dollars or ten dollars or whatever I could afford at the time, and she
then would make other solicitations and if she got together say three
hundred dollars and the total amount due the teachers was five hundred
dollars, well then the teachers all got sixty percent of what they
were entitled to--that was it. And that's the way the school con­tinued
for a long, long time. And then she got the school under the
supervision of the Episcopal Church and they supported it until 1946.
When the San Antonio Junior College system was formed in San Antonio
by J. D. Loftin, he wanted to include St. Philip's and he made arrange­ments
with the Episcopal Church to take it over.
ELLIS: That's how it expanded.
McALLISTER: Yes, that was a very interesting proposition that was one
of the contacts, you might say, that I made that brought me into the
public eye. Mr. Loftin was the father of the junior college system in
San Antonio. He had been a principal of the Lanier High School here
on the West Side and from there had gone to A&I at Kingsville and was
the president of that state school there and stayed there quite awhile.
He came back to San Antonio--I don't know when--but in 1940 or 1941,
he promoted the Junior College idea for all of Bexar County, but it was
defeated at that time. Then the war came along and there was nothing
done and I knew Loftin who became a member of the Kiwanis Club. I was
one of the charter members of the San Antonio Kiwanis Club so I natu­rally
got acquainted with him and liked him very much. One day he said
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to me, several years after this proposal had failed the first time,
"Walter, I want you to help me s tart a junior college district here."
And I said, "Well Joe, I don't even know what a junior college is,1I
which I didn't. I'd heard of it but I didn't know what they did. He
said, "Well, I'll te 11 you what. In three weeks there is going to be
a junior college convention in California. You go out there with me
and we'll inspect several." So I went to California with him, Lof­t
in, and visited four or five junior colleges in California. And I
well remember in my enthusiasm saying to myself, "Now you know, if we
have a junior college that has a thousand students in San Antonio,
that means a thousand families here in San Antonio will save at least
a thousand dollars a year over what it would cost them to send their
children to Austin or a university somewhere else." So we had the
election this time and it included the San Antonio Independent School
District which was the City of San Antonio, six miles square, plus all
of the adjoining school districts, the north, northeast, and the east
side and the south side and so on. And d i d not include all of Bexar
County. And it does not include all of Bexar County yet. So that was
the district and this time, with a good campaign, the proposition car­ried.
I knew that I was a candidate for one of the trustees but I
wasn't at the first meeting and they elected me as the president. So
I served as president of the Junior College Board from the time it was
organized in 1945 until 1960, when I became a member of the City Coun­cil
and had to reSign from the Junior College Board. When I think of
the thousands of families that I was thinking of in 1945, and realize
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St. Philip's has an enrollment of better than 8,000 right now and San
Antonio College has an enrollment in round numbers of 22,000 or so,
there are 30,000 families in San Antonio that are saving this money
that would have to be spent if they sent their children away to school.
ELLIS: And that I think was the size of The University of Texas in
the 1960s ... was 30,000.
McALLISTER: When I went to The University of Texas in 1906, I was
there from 06 to 10, I can't say exactly what the attendance was but I
know it was somewhere around 3,000 .
ELLIS: Was there any discussion or controversy about making the junior
college into a 4-year college? I don't recall ... it seems to me
there was a discussion . . .
McALLISTER : I don't remember.
ELLIS: It served such a good purpose.
McALLISTER: The whole time that I was with the Junior College . . .
that is from the time it was started until 1960 . . . that question
never came up. It might have come up, but never was given serious con­sideration.
And, f rankly, I had a very difficult decis ion to make to
go into city politics and give up my connections with the Junior Col­lege
... of course, that's what I had to do. I sure didn't want to
do it.
ELLIS: Well, that certainly is a valuable institution. You mentioned
in our talking earlier about visiting in the Brackenridge apartment .
Where was that located?
McALLISTER: That was located on the top floor, the 4th floor, of the
building that was known as the San Antonio Loan and Trust Company
Building, which was the building adjoining the San Antonio National
Bank Building on the north side of Commerce Street.
ELLIS: And Col. Brackenridge and his sister lived there?
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McALLISTER: Yes, they lived there together, neither had ever married.
At that time he owned the Water Company and also was the principal
owner of the San Antonio Express ... Express Publishing Company.
ELLIS: And he developed the city water system . . . beyond the point
which it was.
McALLISTER: Well, it real ly wasn't too much of a water system ...
when he developed it . Subsequently it became very well managed and a
good expanding service ... for the City of San Antonio. The City
bought it in the '20s ... 1 don't remember just exactly what year
. 1923 or 25 somewhere along in there . . . when the City of
San Antonio bought the water system.
ELLIS: This is just a question of curiosity . . . what was the bulk
of the Brackenridge estate's settlement since neither of them had any
children . . . was it left to the City or some society?
McALLISTER: Yes. There is a Brackenridge Foundation and they have
been very generous in giving. I don't know that the estate is so very
very large as far as that goes now ... 1 mean I don't know what it
amounts to . but 1 would say probably not over three to five mil-lion
dollars. But, at any rate, the law firm that was in that same
building, the San Antonio Loan and Trust Company Building, that repre­sented
Brackenridge, was Denman, Franklin and McDonald and that Denman
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was the father of Leroy . . . the grandfather of Leroy and Gib Denman
. of today .
ELLIS: And you also mentioned in our chat that you went to school
with Latrobe Onderdonck?
McALLISTER: Yes, Latrobe Onderdonck was a schoolmate, I didn't know
the family too well, but as I recall, Latrobe was a younger brother of
Julian, the well-known painter.
ELLIS: And also Eleanor . .. who was the art curator .
McP~LISTER: Yes ... and Selma Onderdonck. They lived on Dewey, just
east of San Pedro Avenue . and . . . the site where their home was
is part of the tract where the Junior College now has the McAllister
Auditorium.
ELLIS: That brings us up to our discus sion before when we were talking
about the fact you had decided to take up the management of the
undivided Frost estate which required that you move your business
offices to the Houston Building.
McALLISTER: That ' s right.
ELLIS: And that's where we were
McALLISTER : That was in . . . I think that was in 1916 or 17 .. . it
was along in there about that time . I found my relationship with the
Frosts . . . Joe Frost was the son of the founder, one of the sons of
the founder, and he was the vice-president of the bank and really the
managing officer. His older brother, Tom, was the president of the
bank but Joe was real ly the one who ran the business . . . at least
that was my opinion abou t it then.
ELLIS: Do you recall the origin of their financial business . . .
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were they an old San Antonio family? Evolved into the banking busi-ness?
McALLISTER: Yes, they were an old San Antonio family that were in the
merchandising business and, like many of the merchants of those days,
they became bankers as well and for instance, Oppenheimer Bank,
that remained a private bank; and Frost 1 s was a private bank, too.
originally customers would come in to the general merchandise store
and as the merchant had a safe, they would leave money
there with him and that's the way the bank started. I don't know in
what year the bank actually was incorporated . . . I can remember fr om
my earliest recollections that the Frost Bank was on that corner fac -
ing east on Main Plaza running through to Military Plaza. . . I
don't know what year it was founded but I know that it must have been
not later than 1895.
ELLIS: So then you were associated with Joe Frost, who was the vice­president?
McALLISTER: Yes, Joe Frost was the vice- president and I handled the
rental and the collection of the rents of the Frost Estate. They had
quite a bit of property that had not been divided from their father ' s
estate . . . They had, of course, the bank stock and that had been
divided . . This didn't have any thing to do with the bank. But they
had quite a bit of real es tate and the funny thing is that I started
to help them and acquired the block where the bank is now. I am not
critical of the person, but Adelman owned that one corner there and
you couldn't buy . nothing doing . . . not a chance . . . that was
all there was to it.
ELLIS: And he still has it.
McALLISTER: And he still has it, yes. That's why on some develop­ments
you just have to make them . . .
35
ELLIS: It stymies the whole development of the area. Well now, how
did your association with the Frost Estate continue your ?
McALLISTER: I handled the Frost Estate and was in the insur-ance
business and I had also gotten into the finance business. Auto­mobile
finance which I found to be a very profitable operation in
those days .
ELLIS: And people were borrowing for cars then?
McALLISTER: Correct. And then in October of 1920, Mr. Hillyer of the
Hillyer Deutsch, Jarrat Lumber Company, one of our largest retail lum­ber
yards, on South Flores Street, came to me and asked me if I
wouldn't organize a building and loan association. And I said to him
right away, "Mr. Hillyer, I don't even know what a building and loan
is." And I d idn' t. I recalled that there had been a building and
loan company in San Antonio in the 1890s because when my father died
in 1907, among his effects were some slips of paper that weren't worth
anything. But they were stock certificates in that company which had
failed. So, as I say, I wasn't too interested, but Mr. Hillyer came
after me again and again and again. In those days financing home
building and so on was done on an entirely different basis than it is
now. If, for instance, you had a residential lot, free and clear of
debt ... we'll say it's worth a thousand dollars and you had a thou­sand
dollars in cash, you would be able to build a house that cost
somewhere in the neighborhood of five thousand dollars and that would
36
mean a lien of four thousand dollars. That was general l y the maximum
amount . two-thirds of the value was the maximum amount of the
loan. All right, now then, you were dealing with a certain contractor
and that contractor made you a proposition and you said, "All right."
And he said, "Well, now I'll see whether I can get this thing
financed." Then he goes to . . . we 'll say he does business with Hill­yer.
He goes to Hillyer and tells him about your proposition. Hillyer
has it checked and appraised, and so on . . . and comes up with the
idea that he's going to advance four thousand dollars to the contrac ­t
or to finish paying t he cost of the material and every thing else to
build your house. So your lien goes to the contractor f or four thou­sand
dollars and in turn is transferred by him to the Hillyer Deutsch,
Jarrat Lumber Company. When the lumber company had, we'll say, a
hundred thous and dollars worth of mortgages they then took them to the
San Antonio Loan and Trust Company or to the Central Trust Company or
to Some other trust company who would, in turn, issue certificates
against the hundred thousand dollars, which certificates were payable
over a period of years. Your loan didn't run over ten years gener­ally,
see? Ten or twe lve years ... was as long as your lien would run
in those days .
ELLIS: You remember what the rate of interest would have been?
McALLISTER: Well, it was always around 10 percent. When we started
the San Antonio Building and Loan Assn . as it was called, Mr. Hillyer
kept after me un til in March of 1921 when I finally went to Ohio and
visited some associations in Cleveland and Columbus to see how they
operated. I went to Ohio for the simple reason that Ohio's associa­tions
had more total assets than the associations of any other state
37
in the Union. Then I went to Chicago and Peoria. I wasn't particu­larly
impressed with the operation up there. On the way back, I
stopped at Dallas and there was a little association there, the Dallas
Building and Loan, that had about a million and a half dollars . . . a
little less than two million dollars in it, and I liked the way they
operated ... their system of operation was entirely different from
the others up north. And that appealed to me so I said to myself,
"Well, I'll start this business. I need a good board of directors
because I'm not too well known and the business isn't well known and I
have to get people who will inspire confidence." So, I got Robert
Barclay, who was the vice -president of the National Bank of Commerce,
whose father had founded the National Bank of Commerce, I got him to
agree to be one of my directors . And Franz Groos, who was president
of the Groos National Bank, agreed to be one of my directors and then
I got Harry Rogers, who is one of the citizens that San Antonio fortu­nately
acquired when Oklahoma passed the income tax. (We gained many
fine citizens in San Antonio at that time.) Harry Rogers was one of
them. He's the man who was the Director of the Alamo National and was
responsible for the Alamo National moving from their building on the
corner of Presa and Commerce Street ... to building this new building
down here on St. Mary's Street. He also was the one who built the
Milam Building. He was a good developer and a crackerjack man ..
And so I got those three bankers; then I got Mr . Hillyer to serve as
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one of my directors. And I got Albert Steves who was at that
time the head of the Ed Steves and Sons . their Sunset Yard.
Albert had a brother, a bachelor brother, Ernest Steves, who had a
yard on the West Side near the INGN depot, later Missouri and
Pacific depot. There was a relationship between them . . . of course,
they were brothers but I don't know what the relationship was in a
financial way. . At any rate they all agreed to serve and then I
got Nick King, who was then the head of the King Furniture Company
which was on Commerce Street, adjoining the First National Bank-- and
that was owned by the Stowers Furniture Company . . . it was part of
the Stower ' s Furniture Co., then Mr. Hillyer's manager, Gerald Melliff,
a younger man, when I was in the midst of this organization came to me
one day and said, ''Walter, I want to join you in this company." I
said, "Why, Gerry, I can't ask you to come join me. Hillyer is the
one that got me into this thing. I would just be cutting his throat.
I wouldn' t do that." Well, he kept after me. And I said, "All right.
I 'l l tell you what I'll do. If I can go to talk to Mr . Hillyer about
it, I'll be glad to have you associated with me." And so I went to
Hillyer and I said, "Now I didn't start this," but I said, "this is
what has been proposed to me," and I related the conversation. And he
very wise l y said, "Well, Walter, you know I will be very, very sorry
to lose Gerry, but when a man makes up his mind he isn't happy in the
job he's got and he's working for you, the sooner he gets away the
better off you are and he is, too." And he said he would always be
regretting the fact that he hadn't gone with you if I were to persuade
39
him not to. So, if that's what he wants to do why, he can do it." And
so, to make a long story short, Gerry and I then formed a partnership
and we organized the San Antonio Building and Loan, as it was called.
In those days it was a pretty simple proposition to get a charter, and
we only had about five thousand dollars, not each but all together.
Didn't have any money at all to speak of. If you wanted to organize
one today in San Antonio, you would have to have at least a million
dollars, paid in, before you could even talk about getting a charter,
and then you might have trouble getting the charter. But, be that as
it may, it was a rather interesting experience: We opened--I opened
business on the seventh dayof July in 1921. I started to solicit
business firms on Houston and Commerce streets to open savings accounts.
For instance, Hertzberg 's, I went to Hertzberg's and I sold them on
the idea of saving three hundred dollars a month. In those days, we
sold shares. In other words, you'd buy a certificate for a hundred
dollars. On every hundred dollars you paid 50 cents a month on it.
So, if you paid five dollars, why you would have a certificate for a
thousand dollars ultimately, and so on. That's the way it was done.
We started out by paying 10% dividends and lending money at liflo. And
you 'll say why how could you make your expenses on that? Well, we had
a gimmick that was perfectly proper and legal in those days called the
membership fee and the membership fee was 1-1/2%, so if you want to
save a thousand dollars, took out a thousand-dollar certificate on
which your payment was five dollars a month, or more in units of five,
the first fifteen dollars, 1-1/2% of a thousand, came to us. And if
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you, after paying in twenty dollars, you wanted to withdraw, you could
withdraw five dollars, that's all you got. But you had that fifteen­dollar
credit against an account if you wanted to reopen one later on.
And on loans, if you borrowed, in the illustration I was just giving
you, $4,000, we sold you a certificate for $6,000 so that your loan
would be paid off ina short period of time and on that $6,000, you
paid $30 a month and then you paid one- twelfth of the interest--your
loan was $4,000, 10% was $400 a month which would be $33. So you paid
about $65 a month on a $4,000 loan. In other words, the way we always
figured it, we said your monthly payment is 1-1/2% of your loan. If
you had a loan of $6,000 your monthly payment was $90, which is very,
very much higher than it is today. Now, the term for repayment has
been extended to 20 years, sometimes longer.
ELLIS: Since this was a totally new concept, you must have really had
to do some studying and planning to evolve all these concepts of
finance.
McALLISTER: Oh, yes, I sure did. I had to go to Dallas to get copies
of all their forms and everything and, as a matter of fact, there was
a professional man going around organizing savings associations at
just about that time. He didn't have anything to do with my starting
but I got him to come to San Antonio and to help me to get the organi­zation
set up on the best basis.
ELLIS: And then I suppose, too, you had to sort of educate the public
here to this new concept of finance--the citizenry was not aware of
this ?
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McALLISTER: Exactly. Why, I tell you what, I put in my time, my full
time from July 7 to the end of the year. It's true I still had the
Frost Estate to manage; I still had an automobile finance company, and
I had an insurance company but I had good men managing that. You
might say that I gave most of my time to getting the new association
started. I gave at least 80% of my time to the savings and loan busi­ness.
And at the end of the year we had less than $50,000 assets,
which was a lot of money for those days. Now, it would be a small
amount for a single day.
ELLIS: Gosh, you really did a bang-up job on that. Well, did you
appeal at this early development stage, were you approaching mostly
businesses at this point, or were you trying to solicit accounts from
everybody?
McALLISTER: Oh, from individua l s and business. I made every office in
the Brady Building and I went from one secretary to another urging the
secretaries to save 10, 15, 20 or 25 dollars a month. If I got a $25-
a-month account from the girl, why she was top-flight, believe you me.
ELLIS: Yeah. Well, when, Mayor McAllist er , did you evolve the idea
of having schoo l savings?
McALLISTER: I'd heard about that when I went north, and then, a man
came, I can't recall his name right now, to San Antonio. I got him to
come to San Antonio and he helped me sell the school board on the
proposition of permitting this to be done in the schools, and that was
no small feat, believe you me. But I'll say one thing, we didn't
charge a membership fee on these accounts. We gave them the benefit
42
of whatever full interest we could pay. We got off of this membership
fee business in about, oh, two or three years and then simply made our
loans at 1070 and paid 8% dividends, and later we dropped down to 7%
dividends--I was familiar with real estate values in San Antonio, so I
appraised every piece of property that we made a loan on, but we also
had a loan committee of the directors. I took two of the directors
each month to inspect the loans that we had made, and they put their
value on them, too, which was reported to the Board. Robert Barclay
was one of them, and it turned out to be a very satisfactory way of
doing business. The directors knew absolutely everything that was
going on.
ELLIS: Mayor McAllister, what do you recall as some of the high
points or outstanding things that occurred during the evolution of
this business? It was the first in town, of course. It was substan­tially
established when we had the Depression.
McALLISTER: Yes, we had reached assets of about $9 million at the
time of the Depression. The Depression started in the United States
with the Stock Market crash on the 29th day of September, 1929. How­ever,
the Depression didn't hit San Antonio until about two years
later--funny proposition, it just didn't affect us at all to begin
with, and then, all at once, two years later, the Depression hit here.
And, as I say to you, I'd go out and take a look at a house, we'll say
that I appraised the house and lot at $6,000 and we made a $4,000 loan
on it, and when the Depression hit, that is , after ' 31, and the man
got behind on his payments, and finally couldn't keep up his payments,
43
we had to foreclose on him, because there was nothing else we could do.
After we'd foreclose on those houses, and we had, I don't remember how
many houses we had at anyone time, but we had a lot of 'em, believe
you me. I'd take a look at that house, that I had appraised at $6,000,
against which I loaned $4,000, and the payments had been down to per­haps
we'll say, to the balance they owed us was $3,800, but the unfor­tunate
thing we didn't do in those days was we didn't make the borrower
pay a proportionate part of the taxes and the insurance each month.
Consequently, when we foreclosed on that house, we also weren't smart
enough to check the taxes and , generally, there was two years' taxes
due $200-$300, which hit us . . .
ELLIS: awful hard .
McALLISTER: Yes, yes. I'd take a look at those houses, that I had
appraised at $6,000, t hat I couldn't sell for $4,000, and I 'd say to
myself, "Who in the world gave you an idea that property was ever worth
that amount of money." Really and truly, it's fantastic. It got so
bad that we finally had to hire a night watchman to visit everyone of
our houses because they 'd break into 'em, and steal the electric fix­tures,
and the lead joints. Now, you don't know what a wipe joint is.
In those days , if you had a wash basins, there was a U joint like there
is now, but that U joint was made out of a piece of lead pipe, hand­made,
see, now you buy it, but then it was handmade, and they'd call
those wipe joints. They took a lot of skill, to be able to make one.
And they cut those out just to steal a pound of lead. It was awful ,
when you go through a situation of that kind, you just say, "Oh Lord ,
I hope we don't ever have another one."
ELLIS: Well, do you think that there's any possibility of that hap­pening?
44
McALLISTER: Yes, sir, I do. I'm sorry to say to you, I am very con­cerned,
I'm very concerned over the fiscal operation of the federal
government. In 6,000 years of recorded history, there has been no
nation that has ever survived a profligate course of spending and
spending and spending in excess of its income. Ultimately, they'll
all collapse. And when you hear the history of our debt, why, it's
just fantastic, that's all there is to it. It's shocking.
ELLIS: Well, I think that everyone has that feeling to a degree. Did
you feel during the time of the Crash, which so many people associate
their financial problems with, did you feel that stock was a good
investment in those days , I suppose you would?
McALLISTER: Oh, yes, I didn't have, oh, I guess I did have some stock
too , as far as that goes, but everything was affected. For instance,
suppose you'd had stock in the Frost Bank, or the National Bank of
Commerce or the Alamo Bank. Well, all those stocks were worth less
during the Depression than they were before the Depression, and yet,
there was only a r emote chance of taking a loss. Now, there was a
certainty that their incomes weren't going to be satisfactory for the
simple reason that they had to charge off a lot of losses. And they
all had losses, and that kept them from showing a profit.
ELLIS: Yes. Having all those houses and property on hand, against
which you had made substantial loans, and there was no market for
selling them at that time, I suppose you just had to ride it out and
hold all of it.
45
McALLISTER: When the Depression hit us, I called a special meeting of
the Board of Directors and said, "Gentlemen, I'm convinced that we are
facing a very, very critical time." I said, "We have lines of credit
with different banks, in town, and some out of town, of approximately
$2 million." Under these conditions I couldn't borrow $200,000 from
them altogether. You see, the reason I had those lines of credit, was
simply this: that we borrowed money, as we'd make a loan, in antici­pation
of the monthly savings I'd know we were going to get the next
month. So at the time of the Depression I think we owed some $250-
300,000 that we had borrowed from local banks. I recall the Depres­sion
hit San Antonio two years after it hit most of the nation.
ELLIS: Did that give you some time to strengthen yourself in its
coming?
McALLISTER: Correct, it did that. And it also gave us time to pre­pare
for the situation. On the other hand, conservative as I consid­ered
myself even then, I didn't anticipate what was going to happen.
Our Association had assets of about $9 million, we had grown to about
$9 million, we were the largest association around these parts. The
Depression hit San Antonio when the City Central Bank failed. We had
one bank fail in San Antonio, and that was the City Central, up here
on Houston Street. I remember, two days before it fai led, we did
business with them, and I didn't know it was going to fail, and I had
given a man, a check for I think $2,500 or $3,000, withdrawal from San
Antonio Savings Association and he didn't cash it right away, and the
bank failed. He came back and said, "What are you going to do about
46
it?" I said, "I I rn sorry, we 1 re in the same fix that you I re in. 11 And,
so, as I said to you, that when that bank failed, then the Depression
really hit San Antonio. And I called my board of directors in right
away, and I said, "Gentlemen, there isn I t but one thing for us to do.
We've got to adopt a rule under the state law, we did not have to pay
out in withdrawals more than one-third of our receipts, monthly receipts,
see. So, that gave us legal protection, and I said, I 'm going to sug­gest
that we pay any small account in full, but anybody that has a
large account, $5,000 or $10,000, I' l l make a deal with him on,
see what he can get by with, and we will pay as much as a maximum of
$150 a month, that's enough for anybody to live on, which it was in
those days. And that's the basis upon which we operated. And, as a
consequence, we were in a process of liquidation during the entire
Depression from 1932 on. Mr. Herbert Hoover was one of the most cap­able
men, in some ways, we ever had as President of the United States.
He was a remarkably able executive. And he had called together groups
of busines smen in various lines, including the savings and l oan busi­ness,
and there had been outlined by those committees, programs fo r
their particular benefit, see? How that business should evolve and
expand and so on. And out of that came the provision for the creation
of Federal Savings and Loan Assns., Federal Savings and Loan Insurance
Corporation; the creation of our Federal Home Loan Bank System, and
then finally, under Mr. Roosevelt ' s administration, in 1934, they cre­ated
the Home Owners' Loan Corporation. As a homeo,~er, you had a loan
with us and misfortune overtakes you, you can't pay it. All right,
47
you 1 re paying us 9 or l~k interest. The Homeowners' Loan Corporation
will take over your loan, give us their bonds, charge you 4-1/2% inter­est
and let you pay it out over a long period of time. Well, the point
of it was that the moment that that was done, our collections went
down; our delinquencies increased 35% in less than one month. Every­body
was getting their loan delinquent so they could get the benefit
of refinancing with the Home Owners' Loan Corporation at 4-1/2%
interest. Well, the result of it was that we got a lot of those
bonds that in a short time lost much of their market value.
ELLIS: That building and loan association at that time ... when
did other ones first appear in town?
McALLISTER? We had a small institution that was not recognized too
much as a savings and loan but it was in existence when I started our
San Antonio Savings Association. It subsequently was liquidated by
the state. I don't know whether the people lost any money on it or
not . it never was insured . it was before the day of insur-anee.
ELLIS: And so these other ones just developed . . . as time passed.
McALLISTER: The others came, for instance, Mr. Herbert Hays was one
of the men that I sold savings accounts to for his children and for
himself. He became enthused with the idea and formed a state-chartered
association which subs e quently became the First Federal Savings and
Loan Assn .
ELLIS: Is there any advantage to being federally chartered as opposed
to state chartered?
48
McALLISTER: In my opinion, no. Of course, we could be federally
chartered if we wanted. We could convert to a federal easy enough,
but I don't want to under our state law we have certain advantages.
I'll give you an illustration. Early in the business, back in 1951,
we started a personal loan department. The Texas law authorized loans
to people with household goods as security and for home improvement
loans, in limited amounts. We developed that particular program very
extensively here in San Antonio. And the Federals couldn't do it.
Now the Federals are beginni ng to have the authority of entering into
that operation. I felt that our state charter was more liberal than
the federal . and yet it gave us
because all our savers are insured .
. exactly the same protection
just as if you were in a Fed-eral.
And they had only federal supervision- -we had federal and state.
ELLIS: Are there any new concepts coming up with regard to the struc­ture
or the functions of the savings and loan associations? I notice
you are putting in drive-in windows . . . or had them, which is a con­venience,
well particularly anything like that.
McALLISTER: Yes, we, the first thing that we did, frankly, was, we,
banks, and State banks, and savings and loan associations are con­ducted
by the Texas Finance Committee that is appointed by the gover­nor.
There are nine members, three of them are savings and l oan men,
and six of them are bankers . The six bankers have charge of the bank­ing
department, while the three savings and loan men appoint the sav­ings
and loan commissioner and have charge of the Texas savings and
loan operation, within the law. Back in those days, there was a very
49
good relationship between banks and savings and loan associations. We
were not banks, and banks didn ' t make the kind of loans that we were
making, so our relationship was very satisfactory. Then, in 1951, the
Dallas Federal, which was the old Dallas Buil ding & Loan Assn., which
had federalized in the ' 30s, made an application for a branch . Texas
associations couldn't have branches, and banks couldn 1 t have branches,
in Texas. So, when they made this application for a branch, it wor­ried
me a great deal. We didn't have the right, and yet if the Fed­erals
were going to have the right to establ ish branches, then I knew
that we would get the right; and, if we got the right, I knew that
that would create a l ittle difference between ourselves and the banks,
who didn't have the right . So, I went to Washington and appeared
before the Federal Home Loan Bank Board and told them, informally,
what the situation was, and I said, "I 'm going to ask you to decline
to issue them the permit for a branch . " And they said, "Well, if you
feel that way about it, why don ' t you come up here and testify?" I
said, 111 can't testify, these peop l e are my friends. 1I I said, "As a
matter of fact, if you grant them a branch, I ' ll guarantee you that
San Antonio Savings is going to have application in for three branches,
before you can get the ink dry on that OK of theirs." Well, to make a
long story short, they okayed t he branch, and so, I got an OK for
three branches .
We bought a piece of property in Alamo Heights where our
branch is now, and we bought a piece of property down where Sears
Roebuck is off of Mil itary Highway, on the south side, and we tried to
50
buy a piece of property in the northwest part of the city, and I guess
Son and I drove out and looked at fifteen different places, and one
day we were driving out Fredericksburg Road, and it must have been
pretty far out beyond Handy-Andy Number 7. As we drove out to inspect
another site Son said, "Well, Dad, why don't we put a branch in the
Handy-Andy?" And I said, "Why don't you have a brainstorm?" Again
the new site was unsatisfactory and we turned it down. On the way
back, as we approached the Handy Andy store, I said, "Well, let's go
in and see what we can find in there." So, we went in, introduced
ourselves to the manager of the store, and I said to him, "How many
families does this store serve?" And he said, "Four thousand, two
hundred, and nine t y-six." I said, "How many times do they come a week,
to buy?11 He said, "Two point nine." I said to myself, liMy goodness!
getting l3,000 exposures every week. Gee whiz! That's wonderful."
The next day I said to Son, "All right, I decided that this may be a
good idea . Go out to Handy Andy and see what kind of a deal you can
make. So in three or four days, Son came back and said, "Well, I made
a deal with Charlie. If it's OK with you. " I said, "Well, all right.
What is it?" He said, "They will give us space right in the middle of
their lobby . . . directly in front of their checkers . . . and we
won't pay anything for it ... we however have agreed to cash the
checks for their customers according to their credit procedure." I
said, "They 'll have to guarantee the checks?" And he said, "Yes ,
they'11 guarantee the checks," so that was the basis from which we
went in. We cashed the checks for the customers and then they bought
51
. at the Handy Andy store. Every day we'd have to have an armored
car make a delivery there of the cash that they needed . . to take
care of that day's operations. Later, it was decided it would be
simpler for us if we cashed the checks of the store manager and gave
him the money . . . let him cash the checks for his customers .
according to their own requirements. So that was the basis upon which
we did business. And then, as I say, the Dallas Federal got their
branch okayed and we got three branches. Three right off the bat.
In January of 1953, Eisenhower became President of the United
States. One of my friends rang me one day and he said, "I want to ask
you to do something, but, before I ask you, I want you to promise me
you won 1 t say no without giving it consideration." And I said to
myself, "I know I don't want to do it if you come at me that way." So
he says, "I want you to go to Washington, be Chairman of the Federal
Home Loan Bank Board ." That's the Federal supervisory agency for
savings and loan assiciations. And I said, "Well, I told you I wouldn't
say no, and I'm not going to say no, but it will take me sixty days to
make my mind up." And I said to mysel f, "I declare, anybody takes
sixty days to make up their mind, I wouldn 't have him anywhere." And
he knew me better than I knew myself, I guess . . . He said, "You can
have the sixty days." Well, I felt my feet slip out from under me.
And, to make a long story short, I finally decided that I'd been com­plaining
how our federal supervision wasn't right and here was my
chance to get something done . if I was going to keep on talking,
why I ought to put up, so I talked myself into it . And I talked to my
52
wife, and asked her if she'd mind living in Washington and maintaining
a home in Washington and San Antonio, too. She said, "No:. whatever you
want to do." So I said, "All right." Then I went to my Board and I
told them, I said, "Now, this is the proposition that's been offered
me and I am very tempted to accept it but," I said, "it means that I
will have to quit the San Antonio Savings Association. I will have to
resign as president but," I said, "this is the organization that I sug­gest
you have ." They said OK. Well, I went to Washington.
Originally under Mr . Hoover's plan in 1929, the Home Loan Bank
Board was to be an independent agency consisting of five men, one of
them to be the chairman, and to be directly under the President .
Well, Mr. Roosevelt, with his penchant for change, virtually abolished
the board and made the chairman the dictator, and the chairman didn't
know the front door from the back door of a savings and loan associa-tion
and we were just unhappy over the situation. Under Truman's
administration, we managed to get a three-man board reestablished by
Congress, but they didn't put us under the President; they put us in
the Housing and Home Finance Administration. Well , Al Cole was the
chairman of the Housing Home Finance Administration. Al had been a
Congressman . a Republican Congressman from Kansas. And I knew
him, nice chap, when he was in Congress . And so I went to Washington
and I had a visit with him. I said, "Al, I appreciate your willing­ness
to recommend me to the President." He didn't select me, the other
man selected me, and he told Cole what to do, and that was it. So, I
said, "I'll tell you this, if I get this job, Al, my objective is
53
going to be to ge t us out from under you." I said, "We want our Board
established as an independent organization." And he gave me a wry smile
and said, "Well, Walter, you have to bear in mind that if you take this
job, you' re on the team." I said, "Yes, I'm on the team and r'll play
ball. I can always do one of two things: I can either shut up or I
can resign." And so with that understanding, he recommended me to the
President, and I was appointed and went in office about July of '53.
I found that I got more cooperation from the Democrats than I
did from the Republicans in our desire for independence. Congre ssman
Brent Spence, who was representative from Kentucky, was chairman of
the House Banking and Home Finance Committee you know, introduced a
bill to provide for our independence . In November of 1955, Al Cole
and I were to testify before his committee on the housing bill for
that year. And so I went straight to the top with the four wheeler,
who was due to testify at 9:00. I went by his office at 8:30 and I
said, "Judge, when Al and I get through with our testimony on the
housing bill, why don't you ask me what I think about your bill, pro­viding
for the independence 0 f the savings and Loan Board?" "Good
idea, good idea." So, we testified for about an hour. It went along
nicely and when we finished he said, "By the way, Mr. McAllister,
what's your feeling with regard to H.R. sO and so?"--his resolution
applying for our independence. I said, "Well, Mr. Chairman, I think I
should tell you that I've been advised that the Bureau of the Budget
has taken an 'adverse stand'" and, in government gobbely-gook, that
meant the administration was against it~ So he said, "Well, what's
your personal opinion?" So for fifteen minutes I told him and the
committee why we ought to be independent .... Cole sitting right
54
next to me. And then he said to Mr. Cole, "What do you have to say
about what Mr. McAllister said?" So for about seven or eight minutes,
he politely contradicted me and brought out his point of view. Then
the judge turned to me and said, "What do you think about what Mr. Cole
said?l1 "Wel1,11 I said, "just let me say to you and the members of the
committee that what Mr. Cole has said hasn't changed my opinion one
bit, but I want to say that if we have to be under anybody, we couldn't
be under a nicer man than Al Cole. My relationship with him these
years has been a very satisfactory one"--so I calmed the waters. Before
the end of the year, why the resolution was passed by Congress, and we
became independent.
So when we got our independence about the beginning of 1956
why I said, "Well, I've achieved the thing that I wanted to do. I've
put the Home Loan Bank Board back on the road of indepencence and so
on," and managed to get through a few other bits of legislation benefi­cial
to us. And so in March, I wrote the President a l etter of resig­nation,
and I said he could make it effective any time that he wanted
to. I suggested leaving any time prior to July 1 so that my successor
could be confirmed by the Senate. Well, I went on about my business and
I happened to be in Fayetteville, Arkansas, the latter part of May, and
something came up that made me think about this resignation of mine and
I said , "By gosh, two months have gone by and I haven't had a reply.
What the hell." So I picked up the telephone when I got to the hotel
55
and called my secretary in Washington, and no, nothing had come in. I
said, "Well, I'll be there tonight. Make an appointment please with
Sherman Adams for tomorrow morning"--Sherman Adams was the business
manager of the Eisenhower administration. He 'd been the governor, you
know, of New Hampshire. So the next morning at 11:30 why I go over to
Sherman Adams' office and the secretary says, "Go right in, Mr. McAl­lister,
hels expecting you." So I go in his commodious office, and
there's a little man seated at a big desk looking down. I said, "Good
morning, Governor. tI Good morning." 11m Walter, .. ," IIYes, yes. 1I
"I've come here to find out if you can tell me what the President wishes
about my resignation ." Never looking up or asking me to be seated, he
said, "Think we 111 take care of it like you wanted." I said, "You mean
that he's going to accept my resignation by July I?" "Yes." I said,
"All right. That settles the business that I've had with you. Now, I
want to tell you something. You're the rudest man that I've met in
government circles. ll I said, "I come in here, you haven't even asked
me to have a seat. I don't think you know what decency and courtesy
is." Then I walked out. He didn't say one word. And, I was so full
of it, that day, later, I met one of the men, who is now in government
employ, very high, who was, he was on the President's Council of Eco­nomic
Advisors, and I said to him, I said, "Arthur, I had a very
unpleasant experience this morning." He said, "What was that?" I
said, "I went in to see Sherman Adams." He said, "Yes, yes . 1I
(laughter) I didn't catch it when he said, "Yes, yes" right away, and
I started to telling him, and he said, l1Yes, yes.l1 And I said, l1you
56
mean to tell me that he does you the same way?" "Yes, yes." I said,
"Well, all right. I had the satisfaction of telling him what I thought
about him, just the same." That's Arthur Burns, who's the chairman of
the Federal Reserve, a very good man .
ELLIS: This concludes the Jul y 16, 1976 , interview with former Mayor
Walter W. McAllister, in his fourth floor office of the San Antonio
Savings Association Building.
.,
MCALLISTER ,WALTER W.tape 2
Bowden,Artemesia, 28,29
Brackenr1dge,Elea~or, 26-28
Brackenr1dge,George W. ,31,32
Bui l ding and Loan Association,
35-42, 48 -51
Depression, 42-46
Federa l Loan Bank Board,51-56
Frost,J0e, 33-35
Loftin,J.D.,29,30
INDEX
St.Philips College,28,31
Schu ltz,Ellen Quillin,27
Sutton, G.J" 26,27
This interview deals chiefly with the beginnings of the Building
and Loan business, its growth and success as SASA(San Antoni o Savings
Association); the Depression as it related to financial matters ; and
McAllister's service in Washington as a member of the Federal Loan
Bank Board, "