BLUE HILLS HERITAGE FOUNDATION

– 2019 Individual Inductee –

John Rex Duwe

 

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Banking Magazine

November 1975

By Joe Asher

Meet Rex Duwe, 90th president of ABA

 

J. Rex Duwe belongs to a rare breed. The new president of the American Bankers Association [ABA] looks, talks, and acts like a small-town banker. He is a small-town banker. But the big surprise is that, in some very important ways, he has the mental horizons of a big-city banker. And he is working hard to bring the two camps together on issues that divide them, including prickly ones like branching and electronic funds transfer.

                                

“At ABA,” he says, “I hope to be an industry-unifying president.  Nobody realizes more than I do all the quarrels that go on among bankers. But my message to the big banks and small banks, the urban banks and the rural banks, is:

 

“Let’s don’t dwell so much on our differences. We have many times more common denominators and common interests than differences.”

 

The talk is plain, direct, devoid of rhetorical tricks. Duwe (pronounced “Dewey”) is no silver-tongued orator, but he has developed a commanding presence in his tall, lanky, craggy-featured way.  What he conveys is conviction, and, before long, intense credibility.

 

As a neighboring banker in his native Kansas says: “When Rex gets up to speak at a meeting, you start out not expecting much. But by the time he’s through, you believe every word he says.”

 

Credibility, then, is one of the important keys to Duwe.  That, and an abiding belief that reasonable men can settle their differences, even drastic ones, without shouting, power plays, or “dirty tricks.”  What makes this more than a pious hope is that Duwe has proven it can be done.

 

Duwe’s Home Scene

To capture the flavor of the man, visit him on his home grounds in Lucas, Kansas, where he is chairman and president of the Farmers State Bank. This is gently rolling farm country in the north-central part of the state. And farm lending is the lifeblood of his bank’s business.

 

Lucas itself is a town of some 620 people.  When it went over 600 recently, Duwe dryly termed it “a population explosion.”  There is just one shopping street, and the bank is halfway down it.  It’s a one-story building, staffed by seven people altogether, and it is literally too small to have a private office for its president.  So Duwe often works at home, two blocks away, where he has one room set up as an office, with a typewriter (he types his own letters), adding machine, and files.

 

From here, Duwe keeps tabs on not only the Lucas bank, but two others, as well; he’s also president of Traders State Bank of Glen Elder, 30 miles northeast of Lucas, and vice chairman of Sylvan State Bank of Sylvan Grove, 10 miles east of Lucas.  Each of the latter towns is under 600 population; all three banks have about $5 million apiece in deposits.

 

“The main crop here is winter wheat,” says Duwe matter-of-factly.  “When that’s done, sorghum.  Livestock is getting more and more important to the local economy, but there are no feeders here, just growers.  Lucas is an active town – there are two auto dealerships here, not just one.

 

“Loan demand at the Sylvan Grove bank is always very low.  At Glen Elder it’s high, and Lucas is a mix in between.  You get a nice balance, taking the overlines to one of the other three.  We haven’t had to call on our correspondents in quite a while.

 

“In a small bank,” he goes on, “everybody works at everything. You do not get compartmentalized; you get to do anything and everything.  We even taught our girls to handle certain types of loans.  Each bank has a staff of seven or eight, turnover is low, and there are good management teams in all three – I handpicked them.”

 

All in all, this could be any rural Kansas banker talking.  But not quite – there are some surprises coming.

 

His Start in Banking

First, it turns out that Duwe’s father was president of the Lucas bank before him.  But Rex didn’t inherit the bank, he bought it over the objections of his very reluctant father.  Duwe’s interests in all three banks were financed by borrowing that took years to pay off. Says Duwe:

 

“Neither Winnie [his wife Winifrede (Wiley) Duwe] nor I were given or inherited anything.  I worked very hard to get the banks paid for.”

 

Duwe’s father, John Rex Duwe, Sr., was born in Iowa and reared in Nebraska, then went to business college in Kansas, first in Salina, then in Natoma, where Rex was born on April 18, 1918.  His mother Florence (Starbuck) Duwe was a schoolteacher, and the family [which eventually included three more sons – Kent, Bob, and Bill] moved to nearby Lucas in 1923, when the elder Duwe went to work for Farmers State Bank.

 

Duwe Senior, described by his son as “an excellent businessman with lots of energy,” worked his way up to the top at the bank, and acquired a minority interest in it.  As a boy in junior high school, Duwe Jr. got his first taste of banking by working for his father, handposting machines.  He graduated from Lucas High School in 1935 and took three years at Washburn University in Topeka, then went back into the bank, working his way up to cashier.

 

After two years in the in the Army Air Corps as a radio instructor during World War II, Duwe completed a B.A. in economics at Washburn in 1947, returned to the bank and was confronted with a dilemma.

 

Duwe Sr. had gotten interested in oil, made some very successful investments, and had gone off to Wichita to look after them.  Duwe Jr., married [to Winifrede on February 12, 1939 at her parents’ home in Plainville, Kansas] and by now the father of two boys [Richard “Rick” and Barry], “felt thwarted” by his father, with no clear succession promised him in the bank.

 

“I was always interested in banking and wanted to stay in the field,” he says. “But my father just wasn’t giving an inch. Either I had to get control of the bank, or go elsewhere, if my father wouldn’t help.”

 

The upshot was that he put together a local group of investors, borrowed money, and bought another minority interest in the bank.  Meanwhile, Rex persuaded his younger brother to join him, all of which left the elder Duwe perplexed, if not annoyed

 

“We had strange relations at the time,” Rex can say now. “He went around tightlipped for about a year.  But when he found out that I was serious about running the bank, and that it wasn’t falling apart, we came to have better relations than we ever had before in our lives.”

 

When his father did come around, he sold off his block of stock to the younger brother.  When the latter died, Rex bought it, which at last gave him that long-coveted control of Farmers.

 

The Glen Elder bank acquisition was also fairly strange.

 

“In 1967,” says Duwe, “the bank was broke.  They had one bad customer who defrauded the bank.  They were 48 hours away from hanging the bankruptcy sign on the door.

 

“The state banking commissioner, the FDIC, and my correspondent bank, Commercial National of Kansas City, all encouraged me and asked me to look it over.  I had just so much time to evaluate it and decide just how bad it was.  Both sets of bank examiners agreed to meet me up there, and I picked their brains.  I decided to go ahead, and Commercial National lent me the money to make the purchase.

 

“It was common knowledge that the bank was in serious trouble, and I had to prepare for further erosion.  I figured I could lose another 20% of the deposits before a turnaround and still be in a good cash position.

 

“But the erosion never occurred.  The customers showed faith, the bank got turned around in one year, and deposits went from $1.9 million then to over $5 million now.  It was the best single financial move I ever made.”

 

The third bank, the one at Sylvan Grove, had a more orthodox history. That acquisition, too, was financed by a loan from Commercial National. And Duwe speaks feelingly about them.

 

“I had a balance sheet problem,” he says. “All I had at first was an old car and some furniture – nothing worth that much.  But they knew me and helped me.  You don’t forget that.  You can bet they will stay our main correspondent bank.”

 

These days, all three banks are fairly prosperous.  Duwe says he generally gets a profit of around 1.2% of footings, although lighter-than-usual loan demand will bring it down somewhat this year.

 

For tax reasons, he cut back his share of the Glen Elder bank last year to 50%.  But he still maintains an active voice in its affairs.  And he has insurance agencies [president of Glen Elder Insurance Agency and owner of Duwe Insurance Agency in Lucas and Sylvan Grove] at all three banks – the only ones in each town.

 

He’s helped to bring business to Lucas – a nursing home and a light manufacturing concern for which he found financing.

 

Active in Politics

So far, this could be a community banker’s very pleasant success story, and no more than that.  But Duwe has always had a certain fund of restless energy that needed other outlets.

 

A great believer that every citizen should take an active interest in politics, not just when he needs a favor, he served on the Republican State Committee, and held down the job of Kansas State Highway Commissioner from 1962 to 1968.

 

He chuckles when he recalls that “my conservative banker-friends thought I had popped my cork” when he proposed that state freeways be built and financed with revenue bonds.  (The freeways finally did get built, but on a pay-as-you-go basis.)

 

He ran for the state senate in 1968 and lost.  But he was simultaneously campaign manager for the local GOP congressman, who won.  And Duwe ran the same congressman’s three subsequent campaigns, all wins.

 

Peacemaker Emerges

He took an active role in Kansas Bankers Association (KBA) affairs, and this is where his particular skill as a mediator between extreme partisans began to surface.

 

The KBA was badly split on the branching issue, and during Duwe’s 1972-73 term as its president the battle came to a head.

 

“What you have to understand,” he explains, “is that there are 614 banks in Kansas, and more than half of them are under $10 million in assets. So this is essentially a small-bank state.

 

“But I could well understand the great needs of banks in the cities.  Of course the bigger banks in Kansas City, Wichita, and Topeka wanted branches or multibank holding companies.  And not just them; there were also some aggressive banks elsewhere that wanted to grow.  It got terribly tough, and you wouldn’t believe the heat from both sides.”

 

In the end, Duwe was able to get both sides to accept a detached-facilities bill, carefully avoiding the use of the word branch.  It allowed a bank to have up to three more offices anywhere within the city limits of the home office, and the banks could offer any normal services except lending from those offices – even safe deposit boxes.

 

“We made studies of what was salable to the legislature and acceptable to the membership, and what didn’t have the chance of the proverbial snowball,” says Duwe.  “If you go in and try for the moon, you don’t get anything.  This was something attainable.”

 

The governing council of the KBA was split on this move.  Duwe had a tie-breaking vote, broke the tie, and got them to move forward with the compromise.  Then he put the most vocal extremists from both sides on implementation committees.

 

In the end, each side got something, the danger of an open split ala Illinois was narrowly averted, and the scars slowly started to close.  No member bank left the KBA, and today, says Duwe, “It has more unity than I can ever remember before.”

 

Other bankers confirm that he acted as a skilled mediator, a hard­headed bargainer, and in the end a great healer of the wounds left by this battle.

 

His Horizon Broadens

Well before this, Duwe was already enlarging his scope as a banker and citizen.  He graduated in 1954 from the School of Banking of the University of Wisconsin.  He joined Washburn University’s board of trustees, served on the Lucas City Council in 1951-1952, as mayor of Lucas [in 1947-1949 and 1952-1953], and in the 1960s began aiding ABA with testimony on Capitol Hill on issues of interest to small banks.

 

He’s always been interested in economic education.  At KBA, he chaired the committee that set up a KBA chair in banking, offering a degree in bank management, at Wichita State University.  He’s a former trustee and head of the executive committee of the Kansas Council on Economic Education.

 

As ABA President, he will not pursue the branching issue, feeling strongly that this is a matter for the individual states to decide.  But he has already plunged into the fray on a subject no less strewn with booby-traps – electronic funds transfer.

 

It took the usual toll: only short flying visits back to Lucas, now and then.  And fewer chances for him and his wife to indulge in their favorite pastime – traveling on freighters to remote parts of the world.  The Duwes like to buy $75 or $100 worth of books, read them one by one on a long sea voyage, and then leave them aboard when they finish the trip.

 

When they are at home, the Duwes lead a quiet life.  Their sons, Barry and Richard, are grown up and have moved away.  Barry is an attorney in a Kansas City suburb, Richard is a family counselor in Columbia, Missouri.

 

Besides reading, the Duwes enjoy music.  They have a Hammond organ in their living room, which Rex plays.  Although not as active in the local Methodist church as when he spent all his time in Lucas, Duwe remains its treasurer, a job he has held for 25 years.

 

The year ahead will be a grueling one.  But at the end of it, Duwe has something special to look forward to – a brand new $250,000 bank building designed to replace the present one in Lucas, built in 1909.  He had a hand in designing the new structure, which is close to completion, and, at long last, he will be getting what he always wanted – his very own private office at the bank.

 

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John Rex Duwe was indeed not one to sit around.  He was with the Farmers State Bank in Lucas for over 50 years.  In addition to being the chairman of the board of both the Farmers State Bank of Lucas and Traders State Bank in Glen Elder Rex served on the board of directors of Commerce National Bank in Kansas City, Kansas.  Locally Rex was a member of the Lucas United Methodist Church and on the board for the Lucas school system.  He was a charter member and served as president of the Lucas Lions Club. Rex was manager of the Lucas American Legion Junior Baseball team for 10 years and served as commissioner of the K-18 Baseball Association.  Appropriately enough, Duwe Street in Lucas is named in his honor.

 

In 1964 Rex was named Man of the Year by the Russell Daily News.  He was an executive committee member and president in 1966 of Kansas Council on Economic Education.  Rex was president in 1969 of the Kansas Day Club.  He was the campaign chairman for all Kansas First Congressional District Republican candidates from 1968 to 1990 and served as a delegate to the Republican National Convention in both 1968 and 1972. 

 

There is still more.  Rex was appointed to Wichita District Advisory Council of the Small Business Administration April 1972, serving as chairman in 1973.  He was a trustee of the Washburn University Endowment Association in Topeka and a charter member of the Wesley Foundation of Wichita, Kansas.  In 1973 he received the Distinguished Service Award from the Kansas Bankers Association.

 

Rex was named 1975 Kansan of the Year for finance by the Topeka Daily Capitol, and October 8, 1975, was proclaimed J. Rex Duwe Day in Kansas by Kansas Governor Robert F. Bennett.  In 1976 Rex was bestowed with the prestigious Eagle award from the American Bankers Association.  He received the 1977 American Banking Leadership award from the New Mexico School of Banking of Albuquerque, New Mexico and that same year received the Distinguished Service Award from his alma mater, Washburn University, and made a honorary member of Beta Gamma Sigma Business Scholarship Society of Wichita State University.

 

And in 1977 Rex was named Kansan of the Year by the Native Sons and Daughters of Kansas. 

 

John Rex Duwe, Jr. died Sunday, April 22, 1990, at Asbury Salina Regional Medical Center in Salina, Kansas.  He was laid to rest in the Fairview Township (Lucas) Cemetery. 

 

Stories about J. Rex Duwe abound, and what you have read so far is just a taste of the rich and rewarding life that he made for himself and countless others.  It is indeed with great honor that he takes his rightful place in the Russell County Kansas Hall of Fame.   

 

 

SOURCES:
Richard “Rick” Duwe, Shawnee, Kansas.

 

City of Lucas, Lucas City Council Minutes, 1947-1953.

 

Asher, Joe.  “Meet Rex Duwe, 90th president of ABA”.  Banking, November 1975, American Banking Association, ppgs. 36-188.

 

Salina Journal, April 11, 1962 Page 17; January 2, 1964, Page 1; November 17, 1966, Page 9; August 5, 1968, page 33; January 2, 1964, page 1; August 5, 1968, Page 33; July 24, 1990, Page 9.

 

New York Times, April 30, 1975; October 11, 1975.