Chase Manhattan Bank

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The Chase Manhattan Bank, now part of JPMorgan Chase, was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. The bank is headquartered in New York City.

"After an epidemic of yellow fever in 1798, in which coffins had been sold by itinerant vendors on street corners, Aaron Burr established the Manhattan Company, with the ostensible aim of bringing clean water to the city from the Bronx River but in fact designed as a front for the creation of New York's second bank, rivaling Alexander Hamilton's Bank of New York."[1]

Chase National Bank (formed in 1877) was named for former United States Treasury Secretary and Chief Justice Salmon P. Chase, although Chase didn't have a connection with the latter entity.

A Chase Bank location in Austin, Texas across from the University of Texas at Austin
A Chase Bank location in Austin, Texas across from the University of Texas at Austin

The Chase National Bank was a leading wholesale bank in the 1920s and it acquired a number of smaller banks through its Chase Securities Corporation. Its most significant acquisition though was the Equitable Trust Company of New York in 1930, the largest stockholder of which was John D. Rockefeller Jr. This made it the largest bank in America and indeed the world.

Under his successor, George Champion, the antiquated 1799 state charter was relinquished for a modern one, and under his later successor, David Rockefeller, the bank became part of a bank holding company, the Chase Manhattan Corporation.

As Chase was a much larger bank, it was first intended that Chase acquire the "Bank of Manhattan", as it was nicknamed, but it transpired that Burr's original charter for the Manhattan Company had not only included the clause allowing it to start a bank with surplus funds, but another requiring unanimous consent of shareholders for the bank to be taken over. The deal was therefore structured as an acquisition by the Bank of the Manhattan Company of Chase National, with McCloy becoming chairman of the merged entity. This avoided the requirement of unanimous consent by shareholders. Burr transformed the Manhattan Company from a water carrier into a bank.

Contents

[edit] TWEA

On April 17, 1945, the Chase National Bank "was placed on trial in federal court on charges of having violated the Trading With the Enemy Act." (Higham, Trading 26-31)Chase Bank and the Morgan Bank were expressly forbidden to keep open their branches in Occupied Paris.

Treasury officials urged that an investigation be started with the French subsidiaries of several American banks — that is, Chase, Morgan, National City, Guaranty, Bankers Trust, and American Express. Although Chase and Morgan were the only two banks to maintain French offices throughout the Nazi occupation, in September 1944 all the major New York banks were pressing the U.S. Government for permission to re-open pre-war branches. Subsequent Treasury investigation produced documentary evidence of collaboration between both Chase Bank and J.P. Morgan with the Nazis in World War II. The recommendation for a full investigation is cited in full as follows.

TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION

Date: December 20, 1944 To: Secretary Morgenthau From: Mr. Saxon Examination of the records of the Chase Bank, Paris, and of Morgan and Company, France, have progressed only far enough to permit tentative conclusions and the revelation of a few interesting facts:

CHASE BANK, PARIS

a. Niederman, of Swiss nationality, manager of Chase, Paris, was unquestionably a collaborator;

b. The Chase Head Office in New York was informed of Nieder-man's collaborationist policy but took no steps to remove him. Indeed there is ample evidence to show that the Head Office in New York viewed Niederman's good relations with the Germans as an excellent means of preserving, unimpaired, the position of the Chase Bank in France;

c. The German authorities were anxious to keep the Chase open and indeed took exceptional measures to provide sources of revenue;

d. The German authorities desired "to be friends" with the important American banks because they expected that these banks would be useful after the war as an instrument of German policy in the United States;

e. The Chase, Paris showed itself most anxious to please the German authorities in every possible way. For example, the Chase zealously maintained the account of the German Embassy in Paris, "as every little thing helps" (to maintain the excellent relations between Chase and the German authorities);

f. The whole objective of the Chase policy and operation was to maintain the position of the bank at any cost.

MORGAN AND COMPANY, FRANCE

a. Morgan and Company regarded itself as a French bank, and therefore obligated to observe French banking laws and regulations, whether Nazi-inspired or not; and did actually do so;

b. Morgan and Company was most anxious to preserve the continuity of its house in France, and, in order to achieve this security, worked out a modus vivendi with the German authorities;

c. Morgan and Company had tremendous prestige with the German authorities, and the Germans boasted of the splendid cooperation of Morgan and Company;

d. Morgan continued its prewar relations with the great French industrial and commercial concerns which were working for Germany, including the Renault Works, since confiscated by the French Government, Puegeqt [sic], Citroen, and many others.

e. The power of Morgan and Company in France bears no relation to the small financial resources of the firm, and the enquiry now in progress will be of real value in allowing us for the first time to study the Morgan pattern in Europe and the manner in which Morgan has used its great power;

f. Morgan and Company constantly sought its ends by playing one government against another in the coldest and most unscrupulous manner.

Mr. Jefferson Caffery, U.S. Ambassador to France, has been kept informed of the progress of this investigation and at all times gave me full support and encouragement, in principle and in fact. Indeed, it was Mr. Caffery himself who asked me how the Ford and General Motors subsidiaries in France had acted during the occupation, and expressed the desire that we should look into these companies after the bank investigation was completed.

RECOMMENDATION

I recommend that this investigation, which, for unavoidable reasons, has progressed slowly up to this time, should now be pressed urgently and that additional needed personnel be sent to Paris as soon as possible. The full investigation was never undertaken, and no investigation has been made of this presumably treasonable activity down to the present day.

[edit] Mergers

In July of 1996 The Chase Manhattan Bank was purchased by Chemical Bank of New York who then changed its name to The Chase Manhattan Corporation, as the name was more well known globally. The state charter remained that of Chemical Bank. The subsequent merger of The Chase Manhattan Corporation and J.P. Morgan & Co. Incorporated was completed in December 2000 - the merged company was renamed JPMorgan Chase & Co. (also referred to as JPMorgan Chase). The bank also acquired Bank One in 2005 and is now the second largest credit card issuer in the US after Bank of America.

In July 2006, Chase sent letters to consumers advising that data tapes had been lost or misplaced that contained private information regarding their Circuit City accounts. The company offered free one year enrollment in their new "Chase Identity Protection Service" as compensation for the considerable risk to which their customers had been exposed.

[edit] References

  1. ^ "Soaking the poor", The Economist, March 16, 2000

[edit] Further reading

  • The Chase: The Chase Manhattan Bank, N.A., 1945-1985, John Donald Wilson, Boston: Harvard Business School Press, 1986.
  • Memoirs. David Rockefeller, New York: Random House, 2002.
  • The Chairman: John J. McCloy - The Making of the American Establishment, Kai Bird, New York: Simon & Schuster, 1992.
  • Water for Gotham: A History, Gerard T. Koeppel, Princeton: Princeton University Press, 2000.

[edit] See also

[edit] External links

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