Chase (bank)
From Wikipedia, the free encyclopedia
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| Type | Subsidiary |
|---|---|
| Founded | 1799[1] |
| Headquarters | Chicago, IL United States |
| Industry | Banking |
| Products | Financial services |
| Parent | JPMorgan Chase |
| Website | chase.com Chase.mobi |
Chase is the consumer and commercial banking division of JPMorgan Chase.[2] The bank was known as Chase Manhattan Bank until it merged with JPMorgan in 2000.[1] Chase Manhattan Bank was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955.[3] The bank is headquartered in Chicago.
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[edit] History
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[edit] The Manhattan Company
Chase traces its history back to the founding of The Manhattan Company by Aaron Burr on September 1, 1799 in a house at 40 Wall Street:[1]
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.
—The Economist[4]
In addition to being fierce political and personal rivals, Aaron Burr and Alexander Hamilton competed in business, with Burr's Bank of the Manhattan Company competing against Hamilton's Bank of New York. In 1804 their rivalry erupted into a duel, leading to the death of Alexander Hamilton. The dueling pistols are owned by the successor company of Chase Manhattan. They are currently on display on the executive conference floor of the JP Morgan Chase building at 277 Park Avenue in New York.
[edit] Chase National Bank
Chase National Bank was formed in 1877 by John Thompson.[1] It was named for former United States Treasury Secretary and Chief Justice Salmon P. Chase,[3] although Chase did not have a connection with the bank.[1]
The Chase National Bank acquired a number of smaller banks through its Chase Securities Corporation throughout the 1920s. 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.[5] This made it the largest bank in America and indeed the world.
Chase was primarily a wholesale bank, dealing with other prominent financial institutions and major corporate clients such as General Electric (which had, through its RCA affiliate, leased prominent space and become a crucial first tenant of Rockefeller Center, rescuing that major project in 1930). The bank also is closely associated with and has financed the oil industry, having longstanding connections with its board directors to the successor companies of Standard Oil, especially Exxon Mobil.
[edit] Merger as Chase Manhattan Bank
In 1955 Chase National Bank and The Manhattan Company merged to create Chase Manhattan Bank.[1] 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 John J. McCloy becoming chairman of the merged entity. This avoided the requirement of unanimous consent by shareholders.
Under McCloy's successor, George Champion, the antiquated 1799 state charter was relinquished for a modern one. In 1969, under the leadership of David Rockefeller, the bank became part of a bank holding company, the Chase Manhattan Corporation.[3]
[edit] Zapatista memo controversy
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On January 13, 1995, Chase Manhattan Bank issued a research report on Mexico, written by an academic consultant, commenting on the small-scale guerilla uprising in the Chiapas region of Mexico and expressing the view that "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."[6]
Responding to criticisms of the report, Chase Bank spokesman John Anderson responded on March 13, saying that the statements "in no way represent the views of the Chase Manhattan Corp." In challenging this response, critics have pointed out that the report had been printed on bank stationery and distributed by the bank.[7] Critics also note that the memo was distributed two days before Mexican president Ernesto Zedillo ordered a military crackdown on the Zapatista rebels.
The memo was authored by an academic, Riordan Roett, temporarily working as a consultant to Chase, who stated that it was "essential, from the investor point-of-view, to resolve the Chiapas issue as quickly as possible."[8]
[edit] Merger with Chemical, J.P. Morgan
In July 1996 The Chase Manhattan Bank was purchased by Chemical Bank of New York, which had acquired Manufacturers Hanover Corporation several years earlier. The name Chase Manhattan Corporation was retained, as the name was better known globally, although the state charter remained that of Chemical Bank.
In December 2000, the combined Chase Manhattan completed the acquisition of J.P. Morgan & Co., one of the largest banking mergers to date. The combined company was renamed JPMorgan Chase & Co. In 2004 the bank also acquired Bank One, making Chase the largest credit card issuer in the US and JPMorgan Chase also acquired Bear Stearns & Co. and Washington Mutual in 2008. After closing around 400 branches of the combined company (less than 10% of the branches), Chase will have around 5,410 branches in 23 states as of the closing date of the acquisition.[9][10] According to data from SNL Financial (data as of June 30, 2008), this places Chase third behind Wells Fargo and Bank of America in terms of total U.S. retail bank branches.
[edit] Acquisition history
The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list):
Chase Manhattan Bank (merged 1995) |
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[edit] References
- ^ a b c d e f "History of JPMorgan Chase: 1799 to present". JPMorgan Chase & Co.. http://www.jpmorganchase.com/cm/BlobServer?blobtable=Document&blobcol=urlblob&blobkey=name&blobheader=application/pdf&blobwhere=jpmc/about/history/shorthistory.pdf. Retrieved on 2007-11-04.
- ^ "About JPMorgan Chase". JPMorgan Chase & Co.. http://www.jpmorganchase.com/cm/cs?pagename=Chase/Href&urlname=jpmc/about. Retrieved on 2007-11-04.
- ^ a b c "J.P. Morgan Chase & Co.". International Directory of Company Histories. St. James Press. 2001. http://www.fundinguniverse.com/company-histories/JP-Morgan-Chase-amp;-Co-Company-History.html. Retrieved on 2007-11-04.
- ^ "Soaking the poor", The Economist, March 16, 2000
- ^ David Rockefeller, Memoirs, New York: Random House, 2002. (pp.124-25)
- ^ "Why Chase Bank is being picketed". The Struggle Site. http://www.struggle.ws/mexico/usa/chasel.html.
- ^ "Chase Bank says Mexico memo 'not policy.'". National Catholic Reporter. http://findarticles.com/p/articles/mi_m1141/is_n21_v31/ai_16732834.
- ^ "US Bank Orders Hit on Marcos". Hartford Web Publishing. http://www.hartford-hwp.com/archives/46/025.html.
- ^ "WaMu lists debt of $8B in bankruptcy filing." Associated Press/International Herald Tribune. September 28, 2008.
- ^ "Q&A What former WaMu customers can expect." Seattle Post-Intelligencer/Houston Chronicle. September 26, 2008. Accessed September 29, 2008.
[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] External links
- Chase website
- An Evolutionary View of Internationalization: Chase Manhattan Bank, 1917 to 1996. A Financial Institutions Center study (pdf) completed in 2002.
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