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Chase Bank

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Chase Manhattan Bank
IndustryFinance and Insurance
Founded1955 (Through Merger)
HeadquartersUnited States New York City, USA
ProductsFinancial Services


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 by John and Samuel Thompson) was named for former United States Treasury Secretary and Chief Justice Salmon P. Chase, although Chase did not have a connection with the bank.

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.

Violation of the Trading with the Enemy Act

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.[citation needed]

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..[citation needed]

Zapatista Memo

On January 13, 1995 the Chase Manhattan Bank sent a memo calling on the Mexican government to crush the indigenous Zapatista uprising, stating "While Chiapas, in our opinion, does not pose a fundamental threat to Mexican political stability, it is perceived to be so by many in the investment community. The government will need to eliminate the Zapatistas to demonstrate their effective control of the national territory and of security policy."",[2]

Chase Bank spokesman John Anderson responded on March 13, saying that the statements "in no way represent the views of the Chase Manhattan Corp.," despite being written on bank stationary and being distributed in a research document representing the bank.[3] The memo was distributed just two days before Mexican president Ernesto Zedillo ordered a military crackdown on the Zapatista rebels.

The memo was authored by Riordan Roett who claimed it was "essential, from the investor point-of-view, to resolve the Chiapas issue as quickly as possible."[4]

Mergers

In July of 1996 The Chase Manhattan Bank was purchased by Chemical Bank of New York (who had recently acquired Manufacturers Hanover Corporation) and then changed its name to The Chase Manhattan Corporation, as the name was better 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 largest credit card issuer in the US.

References

  1. ^ "Soaking the poor", The Economist, March 16, 2000
  2. ^ "Why Chase Bank is being picketed". The Struggle Site.
  3. ^ "Chase Bank says Mexico memo 'not policy.'". National Catholic Reporter.
  4. ^ "US Bank Orders Hit on Marcos". Hartford Web Publishing.

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.

See also

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