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Top Story:  James J. Saxon, the War Hero Comptroller

11/27/2013

By Jesse Stiller
Public Affairs

Growing up on the streets of Toledo, Ohio, young Jimmy Saxon was no fighter. While the other neighborhood kids roughhoused, Jimmy would watch from a safe distance, seated on the handkerchief neatly laid out on the sidewalk to avoid getting dirt on his trousers.

The fastidious part of him never changed. But the pugnacious part did.

After abandoning his plan of studying for the priesthood, Saxon moved to Washington, D.C., doing graduate work in economics at night and working as an analyst at the Office of the Comptroller of the Currency during the day, a job arranged for him by his district congressman.

Former Comptroller James J. Saxon

Former Comptroller James J. Saxon

By 1940, however, the country was mobilizing for involvement in the war that had already engulfed Europe. With his financial expertise, Saxon transferred to the new Office of Foreign Funds Control, whose job was to identify assets belonging to potential enemies. He was on duty in the Philippines, then an American protectorate, when the bombs rained on Pearl Harbor and the Japanese army began its push into the South Pacific. Manila, the Philippine capital, came under siege; and the order came down to seize Japanese-owned cash, securities, and gold—nearly six tons of it—and flee to Corregidor Island, just off the coast, before the enemy arrived.    

It was not long before Corregidor itself was surrounded, with no hope of escape for the Americans holed up there. With the enemy closing in on them, Saxon and his compatriots burned the cash and securities in a gigantic bonfire—unfortunately attracting Japanese gunners in the process.

The gold required special treatment. Throughout the moonless nights of February 4 and 5, 1942, a team led by Saxon loaded the bullion onto the submarine USS Trout, bound for Hawaii. He and the others made their escape aboard another submarine and finally arrived in San Francisco on April 1. The man who had burned millions in currency and secreted out millions in gold had to wire home for $200 to cover his travel back to Washington.

The Philippines episode turned out to be the first of many in a swashbuckling career that took Saxon to Hawaii, the Caribbean, Spain, North Africa, and Scandinavia. As the Nazi regime crumbled around them, Hitler’s minions were increasingly desperate to find a place for the wealth they’d plundered from occupied Europe. It was Saxon’s job to stop them. The evidence suggests that he performed some of these missions as an agent of the Office of Strategic Services, or OSS, the precursor to the CIA. His final wartime assignment was to Paris, where Saxon helped reopen the U.S. Embassy after the Nazis had been defeated and then, after investigation, filed charges against some U.S. banks in France for collaborating with the enemy.

Saxon’s wartime experience helped transform him from an academic into an activist, to someone who took his battles personally and pursued them to the bitter end. It seemed like a gross mismatch when President John F. Kennedy appointed him as the 21st Comptroller of the Currency in 1961, a position that for several decades had been held by relatively low-profile bureaucrats. Saxon was assuredly not that. And, in a series of historic rulings that transformed banking as profoundly as the war had transformed him, he proceeded to demonstrate that he understood, and intended to make full use of, the power of the office, regardless of who he offended in the process. His fellow federal regulators and state banking officials ranked high on that list, and they nearly succeeded in having him removed from his office. Saxon remained defiant, serving to the very last day of his five-year term, bloodied but unbowed.

Last Updated: 04/11/2014