Chicagoans love a tough fight. Whether its the mayor thumping his City Council foes or teachers denouncing the superintendent of schools, local rivalries speak volumes about this hard-knock town. Even the two major dailies reporting these events are not above taking occasional swipes at each other.
But as vicious as these battles can get, each contestant knows the limits. No one will score a knock-out blow.
Yesterday, First National Bank of Chicago followed the unwritten rules: It announced it would not try to take over the troubled Continental Illinois National Bank & Trust Company of Chicago.
For the past month, the near collapse of Continental Illinois has threatened to end the rivalry between the city's two largest banks. The possible loss of one of those competitors has dismayed area businessmen.
''You just don't really think about these things (happening),'' says Jim Porter, chairman of First Options of Chicago Inc. ''I was wearing a Continental T-shirt the other day. And I thought to myself, 'What a sad thing if this becomes a collector's item.' ''
''We're all saddened and disappointed when things like this happen,'' says Martin Ozinga, president of First National Bank of Evergreen Park.
So far, the effect has been more shocking than substantial. ''I don't think the situation with Continental, at this point, has had a real meaningful impact on Chicago,'' says Kenneth I. Rosenblum, president of the Midwest Stock Exchange. ''What meaningful impact it has on Chicago depends on what happens next. There's a real substantial question . . . about who will take its place.''
Until yesterday's announcement, a merger with First Chicago had been touted as a very real possibility.
Two other solutions are being investigated: a merger with an out-of-state or foreign bank, or enough federal aid to allow Continental to remain independent.
Both are problematical.
With several billion in bad loans and other questionable credits, Continental probably can't make it on its own, many observers say. On the other hand, the bank is so big (the nation's eighth largest, with $41.5 billion in assets) that only a few banks would be able to swallow it. And for an out-of-state bank to do that, Illinois's banking laws would have to be relaxed.
Over the weekend, Continental and First Chicago apparently reached or were close to agreement on a proposal that would change Illinois laws to allow such an out-of-state merger, says state Sen. Robert Kustra, a Republican on the state Senate's Banking Committee. Senator Kustra says the compromise only would allow Continental to merge with banks in states with reciprocal interstate-banking agreements. This, in effect, would limit possible merger partners to a few New York banks.
This proposal, along with one from the Illinois Bankers Association, are scheduled to be heard this afternoon before the Senate Banking Committee, Kustra says. Continental ''ought to have all the options out on the table.''
Kustra says he believes a bill allowing interstate banking would be temporary. The state's fourth-largest bank, Northern Trust Company, is concerned that it would be taken over by an out-of-state bank.
There are reports that Continental is trying to find a way to stay independent. In recent days, some Illinois and federal officials have been quoted as saying that the idea isn't out of the question. A Continental spokesman declined to comment, but he said the bank is still pursuing all its options.
Sen. Alan Dixon (D) of Illinois says he believes an independent Continental is ''very doable,'' according to a spokesman here.
Among local business leaders, Continental still inspires much loyality. ''I guess I'd like to see them go it on their own and weather it,'' says Charles Waterman, executive vice-president and director of South Holland Trust & Savings Bank. ''They've made special efforts to learn our business,'' adds Mr. Porter of First Options, the nation's largest options-clearing company. ''And we feel they deserve our business. . . . They're our primary banker.''
One Chicago banker puts it this way: ''We'd like to be better than (the competition), but we want them to do well.''