Which Is the Real McCoy?

It would be a shame if ''The mess at Bank One'' (Finance, May 1), on John B. McCoy's final days as CEO, were to be all that's said about the man. For instance, it was Mr. McCoy's sterling reputation that made possible the 1994 enactment of the so-called Riegle-Neal Interstate Banking & Branching Efficiency Act. A number of bankers, notably Hugh L. McColl Jr., had been pressing Congress unsuccessfully for years to obtain enactment. It was not until McCoy agreed in mid-1993 to become chairman of a task force on interstate banking at the Bankers Roundtable that the legislation got legs.

Throughout the succeeding 15 months or so, McCoy's leadership within the community of large-bank CEOs kept the issue on track. He defused efforts from within the giant American Bankers Assn. to derail the legislation, and he authorized negotiations with consumer representatives that were essential for the bill to become law. None of this would have been possible had not McCoy stood so high in the estimation of his peers. McCoy was the key cog in a many-cogged machine that ultimately brought the public the benefits--for the first time in the nation's history--of true interstate banking. Characteristically, he neither sought nor received credit for his role.

John S. Rippey
Montross, Va.

John B. McCoy's exit from Bank One has left new CEO James Dimon in a jam. Cutting costs may make things better for shareholders, but truth is, there's not much left to cut.

At several local Bank One branches in Boulder County (Colo.), McCoy's legacy--and his emphasis on short-term gains--has ended with the evaporation of vital links with local longtime customers. The elimination of local boards of directors, drastic reductions in local advertising and promotion budgets, six-month rotation/promotion/removal/resignation of local branch managers, reduced staffing and community presence, and alienation of local businesses via extraneous fees leave Bank One in one big fix.

At the corporate level, fractious boards of directors, marginally profitable credit-card units, bulky operations, and oversize management committees are nothing compared with the respect, confidence, and trust now lacking on Main Street for Bank One.

Doug Conarroe
Conarroe Cos.
Lafayette, Colo.

As a trust officer in a bank in Odessa, Tex., I got to see a lot of John McCoy in 1990, when Bank One bought the assets of the old MBank Holding Co. It was apparent then that McCoy was CEO of Bank One because he had the good luck to have a father and grandfather who preceded him in that position. It was only a matter of time until a crisis beyond his ability to resolve proved that to the world at large. That has now happened.

The purchase of MBank assets, which included the personnel of about 20 banks in Texas, revealed another component of the culture of Bank One. While McCoy personally and publicly committed Bank One to honor the many years of experience MBank personnel had accumulated prior to the acquisition, when it came to allowing those years to be used for purposes that cost Bank One money--such as monthly pension payments upon retirement--the bank reneged. For example, someone retiring with 20 years total bank experience, but only two years with Bank One, would get a pension based on two years' service, not the 20 years promised. That is the real ''corporate soul'' of the old Bank One.

Edwin J. Stuart
Greeneville, Tenn.

Every Time the Phone Rings, It Goes ''Ka-Ching''

''Fixing the phone-tax mess before it gets worse'' (Government, May 8) is on the mark. We have allowed the phone bill to be a way to collect taxes for things that used to be luxuries and are now normal facts of life. If I make no long-distance calls, one-third of my bill is taxes and add-on charges.

Get rid of the federal excise tax; get rid of the 911 charge--this is a service that, like fire and police protection, should be paid from general revenues. Get rid of the Touch-Tone charge; it's the norm now. And get rid of access charges. Instead, charge us enough to cover this. Itemization makes it sound as if there is a way to avoid this charge.

Local charges are another matter. In Tennessee, there is a struggle in the legislature over taxes needed to cover a projected budget deficit. The anti-income-tax forces are dominant and would never allow getting rid of phone taxes. But as long as we allow the phone system to be regulated geographically at the federal, state, and local levels, we will continue to have this mess.

David J. Marks
Johnson City, Tenn.

A Penny Saved Is Still a Penny Earned

Regarding ''To save or not to save'' (Economic Trends, May 8): I am an 18-year-old and have been an avid investor for about four years. There are a number of reasons why ''18-year-old'' and ''avid investor'' are rarely found in one sentence. Primarily, it is because we live in a consumeristic society where people are taught that money is immediately spent on goods and services.

There are other factors that discourage saving, as well. The current system of financial aid for college, for example, appears to punish students for saving money. The student is expected to contribute approximately one-third of his or her assets for each year in college. This amount reduces the financial-aid package offered, possibly disqualifying him or her from grants and scholarships. Many students and parents are under the impression that there is no point to saving for college.

If people are not taught at an early age to save, they may not learn to do so until it is too late. The habit of saving and investing money needs to be instilled in children so it will become a lifelong routine rather than be discovered relatively close to retirement.

John Davin
East Northport, N.Y.

Value America's Winn-Lose Experience

Using the phrase ''entrepreneur extraordinaire'' to describe Craig Winn and his management of Value America Inc. is like describing Wrong-Way Corrigan as a brilliant navigator (''The fall of a dot-com,'' Cover Story, May 1). An entrepreneur is someone who takes responsibility for a business and its success or failure. They live and breathe the venture and take personal risk to make it succeed. Nowhere did Winn take responsibility for any of the problems at Value America; he was too busy pulling out cash and pointing fingers at others.

Perhaps we can create a new business term to reflect the way Winn dealt with employees, management, and investors. ''Be careful who and what you invest in, or you might get Winned and lose all your money.''

Jack Smith
Charlottesville, Va.

I disagree with the lesson author John Byrne derives--that is, ''almost anyone can find buyers for a house of cards.'' He does injustice to the notable business persons mentioned and, ironically, to Mr. Winn. Winn is clearly not ''almost anyone''--he appears to be an exceptional salesman with a severe dearth of ethics.

Sure, Internet mania was a part of this, but not just anybody could have pulled this off. I have no sympathy for the big investors--these are supposed to be businesspeople, and they ignored the red flags. I have no sympathy for outside investors, either--they need to do their homework. It's unfortunate that employees of Value America got hurt, because the only action they could have taken was to up and leave, which isn't always easy to do for one reason or another.

Sudhir Srinivasan
Hopkinton, Mass.

Your story on Value America reminded me of Oakland Raiders owner Al Davis. If Davis were asked who was the only person to make money on Value America, he would undoubtedly paraphrase his oft-quoted line about what is important in the National Football League and answer ''Just Winn, baby.''

Bob Burke
Walnut Creek, Calif.

I chose not to get involved in the War of Roses between people who still believe in Craig Winn and his basic vision for Value America, and those who find some value in assailing his character. Whatever the reason people want to disparage Winn, they cannot overcome the actual facts. From the time Glenda Dorchak arrived in the late summer of 1998, she has been in charge of advertising. Winn was attempting to lessen the company's dependence on advertising by creating relationships with charitable organizations, such as American Baptist Churches USA, and businesses with great brands and huge customer relationships, such as Citibank. Winn's plan (turned down by the board) was to decrease the ad spending, which was 70% of the spending, and put efforts into creating more custom marketplaces and affiliate relationships.

The company's private plane was also used in the article as an example of his purported ineptitude. If things don't go right, the airplane is the first ''excess'' articles such as yours like to talk about. As you state, the aircraft was board-approved; there are some very good reasons to have one. Charlottesville is a wonderful place to live and work, and rent and labor are significantly less than a major metro area. But air travel from Charlottesville is difficult. Economics, not Craig Winn, ruled the day for the approval of purchasing the aircraft.

If one bothers to look at the facts regarding the plane and many other issues, Winn begins to look less ''erratic and bizarre'' and more like a business person making the best decisions he could based on the information at hand.

Andrew Rod
Charlottesville, Va.

Mobile Fuel Cells Have a Way to Go

''A clean technology powers up'' (Science & Technology, May 8) did a good job introducing the potential benefits offered to consumers by fuel cells. However, it failed to adequately identify the technical and economic issues that must be overcome to successfully commercialize these devices.

Manufacturing fuel cells in greater volumes will lower their price to some degree, but they won't compete effectively against grid-supplied electricity, which costs an average of 7 cents to 8 cents per kilowatt-hour, until greater advances are made. The reforming process removes hydrogen atoms from the hydrocarbon fuel (usually natural gas) supplied to the fuel cell. These hydrogen atoms are then used to electrochemically produce electricity. Currently, the reforming process lacks efficiency and is largely responsible for the high cost of electricity produced by fuel cells.

Models developed by Datamonitor Inc. show that electricity produced by fuel cells can't compete on a pure cost basis until the cost of an installed fuel cell kilowatt falls to around $2,100. Currently, these costs run $3,000 to $4,000 per installed kilowatt. While other factors, such as proximity to the electric grid, reliability, and power quality, justify the use of fuel cells in some instances, consumers, businesses, and potential investors should be careful not to fall victim to market hype.

Alan M. Herbst
U.S. Energy Practice Area Manager
Datamonitor Inc.
New York

Internet Training Works for SAP

''The talking Internet'' (Special Report, May 8) implies that the use of the Internet for live training is limited to secondary-school education, which is not the case. SAP embarked upon an initiative last year to augment its classroom curriculum by introducing real-time training delivered over the Internet. Since its debut in September, 1999, more than 500 students have participated in live online sessions. The technology we use (developed by InterWise of Santa Clara, Calif.) is similar to what was described in your article, but it has greater functionality and enables SAP students and employees around the world to see the instructor's presentation with associated live annotations, ask questions using microphones attached to their portable computers, and even view live software demonstrations.

The advent of combining high-quality audio with the pervasive presence of the Internet may prove to be the ''silver bullet'' needed by industry and institutions of higher education to rapidly and cost-effectively deliver business and technical continuing education to a global work force.

Ronald W. Berman
Director of Education
SAP America
Newtown Square, Pa.

ZapMe! Keeps Its Data to Itself--More or Less

''The privacy debate goes to school'' (Government, May 1) raised some important issues surrounding online student privacy and commercialism in the classroom. However, while examining the private-public partnership approach undertaken by ZapMe! Corp., the commentary understated ZapMe's mission and the full potential of our education technology services.

Of particular concern was the implication that ZapMe donates equipment to schools so we can monitor students' online activities. ZapMe is a responsible educational partner, providing schools, at no cost, with approximately $90,000 of equipment and support services, including computers and satellite Internet connections. The Internet, paid for in large part by banner advertisements and corporate sponsorships, provides an unmatched array of information and educational resources. No one would argue that the Clinton Administration's initiative to wire the nation's schools to the Internet is simply an attempt to connect students to these banner ads.

We do not sell market-research data. Rather, like nearly every Internet-related company, we provide statistical usage information using aggregated demographic data limited to age, gender, and school Zip Code--i.e., proof that users were on our network--to our sponsors for accounting purposes. They offer to underwrite portions of ZapMe's Net space with educationally appropriate content--including multimedia presentations with an educational focus.

Rick Inatome
CEO
ZapMe! Corp.
San Ramon, Calif.

For $10 Billion, You Can Buy a Lot of Water

''The fight against Latin poverty'' (Social Issues, May 8) skipped over a vital point: public health among the poor. It takes a healthy worker to be productive. Engineers at the Pan American Health Organization tell me that bringing clean water to 95% of the populace of Latin America would cost about $10 billion, plus education in maintenance of the water and sewage plants. This sum is large for individuals but easily managed on the scale of an entire continent.

As noted by Henrik Ibsen many years ago, the introduction of a supply of clean water is the single most significant step you can take in improving public health.

Charles Kelber
Rockville, Md.

Thanks to the World Bank, a Better World

''Bully for the protesters'' (News: Analysis & Commentary, May 1) and its support of the protests against the World Bank and International Monetary Fund (IMF) ends by stating a goal that demonstrates precisely what the bank and IMF are aiming for: ''a more equitable and more livable world.''

The World Bank and IMF are all about fostering such a world. And they have been historically successful. Consider East Asia (minus Japan). In 1950, the median personal income was on a par with those in sub-Saharan Africa. Today, through World Bank development programs and IMF funding, East Asians have standards of living approaching our own. This didn't just happen by itself. The IMF, World Bank, and sound government policies made it happen.

The bank and IMF clearly have had some failures, especially in Africa. But the solution is not to destroy the organizations. Perhaps some countries would be better helped by more dams than bridges or railroads than airports. But they won't be helped at all by protesters who are bent on throwing successful development organizations into chaos.

Benjamin W. Shoval
Philadelphia

The Fed's Y2K Strategy Was a Wash

''For less inflation, try less money'' (Editorials, May 1) shows a lack of understanding of how our monetary system works. It asserts that the Fed overestimated the Y2K problem, printing an extra $50 billion of currency, whereupon the sharp growth in the money supply sent the Nasdaq to the stratosphere.

The Y2K scare merely involved an exchange of bank deposits for cash. The Fed compensated for the resulting loss of bank reserves by buying an equivalent amount of Treasury securities in the secondary market. In effect, the public traded some of its T-bonds for cash. This whole process went into reverse after the smoke cleared, as people deposited the excess cash back into their bank accounts.

The Fed simply accommodated the demand for cash, none of which would be useful or qualify as excess liquidity in the equities market. The cash was withdrawn as insurance against a disruption in the banking system due to potential Y2K problems. Whatever cash the Fed may have printed, over and above what was withdrawn, never even entered the money supply.

William F. Hummel
Los Angeles