Black, Eugene Robert
Black, Eugene Robert
(b. 1 May 1898 in Atlanta, Georgia; d. 20 February 1992 in Southampton, New York), financier who as third president of the World Bank (International Bank for Reconstruction and Development), from 1949 to 1962, made the newly established institution into a major global force, powering the economic development of emerging nations.
Black was the eldest of three children born to Eugene Robert Black, Sr., a prominent Atlanta banker and lawyer who was president of the Atlanta Trust Company, governor of Atlanta’s Federal Reserve Bank, and a governor of the Federal Reserve Board, and Gussie King Grady, a homemaker and daughter of the Southern editor Henry Woodfin Grady. After graduating from the Peacock School, a private academy for young men in Atlanta, Black attended the University of Georgia, graduating with a B.A. cum laude in 1918. During the First World War he served briefly as an ensign in the U.S. Navy. In 1918 he married Dolly Blalock, with whom he had two children before her death in 1928. Black’s second marriage in 1930, to Suzette Heath, with whom he had one child, lasted until his death.
In late 1918 Black returned to Atlanta, joining the local office of the New York investment bank Harris, Forbes and Company, reorganized the following year as the Chase-Harris-Forbes Corporation. Black became assistant vice president by 1933, acquiring a reputation as a bond market expert. In 1933 he joined the Chase National Bank of New York as a vice president, becoming senior vice president in 1937. Offered a position as undersecretary of the U.S. Treasury in 1936, Black initially accepted, but financial considerations led him to withdraw. As World War II ended he became more involved with Chase’s international activities, making several trips to Europe between 1945 and 1947.
Black’s bond market expertise and his international exposure led John J. McCloy, the second president of the new International Bank for Reconstruction and Development, to make him the infant organization’s American executive director, which he became in February 1947. Founded in 1944, the bank was intended to finance postwar economic reconstruction, but its capital was limited. Operations on the scale envisaged necessitated tapping the American capital market, and McCloy hoped Black’s connections would enhance the bank’s credibility. His strategy succeeded a few months later, when the bank floated a $250 million bond issue on Wall Street.
In July 1949 Black succeeded McCloy as the World Bank’s third president. The bank’s early loans went primarily to European countries to finance their recovery from wartime ravages. These countries included France, whose Credit National in 1947 received the first loan of $250 million, the Netherlands, Denmark, and Luxembourg. The adoption in 1948 of the Marshall Plan European Recovery Program led the bank to switch its emphasis to building the economies of developing nations. In April 1948, while still executive director, Black organized its first such loan to Chile. Throughout Black’s presidency, which lasted until ill health caused his resignation in 1962, providing funding and advice to promote economic development in emerging nations remained the bank’s major preoccupation. In that period, the bank suffered no defaults when lending $6 billion of its own funds and substantially more money raised on the open market.
During Black’s tenure the bank’s number of subscribing member nations rose from forty-eight to eighty; its capital grew from $8.3 billion to $20.5 billion; its lending portfolio quintupled, and its staff expanded commensurately. Black reorganized its operations into three geographic departments (Asia and the Middle East; Europe, Africa, and Australia; and the Western Hemisphere) and a technical operations department. In 1955, 1956, and 1960 respectively he introduced three additional subagencies: the Economic Development Institute, to train potential borrowers; the International Finance Corporation, which provided loans to the private sector in developing countries; and the International Development Association, which offered the poorest countries longer-term loans at lower interest rates.
Tall, rangy, impeccably tailored, and usually sporting a homburg hat, the genial Black combined great charm with a reputation for subjecting projects submitted to him to hard-nosed evaluation. An economic conservative with a social conscience, Black insisted that loans should only finance projects that would generate income for repayment. With few exceptions, the bank’s lending financed industrial, agricultural, and power projects that would stimulate the private sector. Black jealously guarded the bank’s independence from political control, causing him to deprecate bilateral aid programs that might subject bank projects to international political interference. He was annoyed when in 1955–1956 American suspicion that Egyptian president Gamal Abdel Nasser was pro-Soviet brought the collapse of projected joint Anglo-American-Bank financing he had arranged for Egypt’s Aswan High Dam.
As president Black spent about two-thirds of his time traveling and established warm personal relationships with many international politicians and financiers. He emphasized the importance of “mutual trust” between the bank and its clients. On occasion he helped to mediate international disputes, resolving the assorted financial claims of Britain, France, and the Suez Canal Company after the Suez crisis of 1956 and in 1960 settling an Indo-Pakistani dispute over the Indus waters.
On retirement Black returned to the Chase Manhattan Bank as a consultant and director. In April 1965 President Lyndon B. Johnson chose Black to create a United Nations—sponsored multinational Asian Development Bank to provide investment funds and research staff to Southeast Asian nations, an attempt to deflect criticism of American involvement in Vietnam. Black also helped to organize other, generally more short-lived, American assistance projects in Southeast Asia. In January 1969 Johnson awarded Black the Medal of Freedom for these efforts.
As special financial consultant to the United Nations from 1963 to 1970, Black attempted to collect overdue obligations from member states that had defaulted on their dues. A passionate baseball fan, he was often mentioned as a potential baseball commissioner. Until 1970, when he retired from most active positions, he held numerous prestigious directorships and trusteeships. He and his wife gradually gave up homes in Washington, Brooklyn, and Florida, keeping only a place in Southampton, Long Island. Black died from heart and kidney failure in Southampton, where he was privately buried.
Black’s major achievement was to place the nascent World Bank on a solid footing. A fundamentally conservative banker, he devised an efficient institutional structure whose operational standards won the international financial community’s confidence, an essential precondition to raising funds on the open market. Despite Black’s emphasis on working with recipient countries and funding only financially viable enterprises, subsequent critics have suggested the bank often effectively encouraged high-profile and environmentally detrimental projects of limited value to the host countries.
Black’s papers are in the archives of the University of Georgia at Athens. He summarized his socioeconomic philosophy in The Diplomacy of Economic Development and Other Papers (1963). There is no biography of Black, though he figures largely in Catherine Caufield, Masters of Illusion: The World Bank and the Poverty of Nations (1996); Catherine Gwin, U.S. Relations with the World Bank, 1945-1992 (1994); Devesh Kapur et al., The World Bank: Its First Half Century (1997); and Edward S. Mason and Robert E. Asher, The World Bank Since Bretton Woods (1973). Material on his association with Chase Manhattan is included in John Donald Wilson, The Chase: The Chase Manhattan Bank, N.A., 1945-1985 (1986). Black’s role during successive presidential administrations is covered in useful short essays in Eleanora W. Schoenebaum, ed., Political Profiles: The Truman Years (1978); Eleanora W. Schoenebaum, ed., Political Profiles: The Eisenhower Years (1980); Nelson Lichtenstein, ed., Political Profiles: The Kennedy Years (1976); and Nelson Lichtenstein, ed., Political Profiles: The Johnson Years (1976). Obituaries are in the New York Times, (21 Feb. 1992); Washington Post (21 Feb. 1992); and London Times (22 Feb. 1992). Transcripts of various oral history interviews by Black are held by the Chase Manhattan Archives and the Dwight D. Eisenhower and Lyndon B. Johnson presidential libraries.