(J.P. Morgan Chase) is an American company with an international business that offers a variety of banking, investment and credit services to its customers. The brand name is borrowed from the name of one of the greatest economists in history, Jeep Morgan, who, according to many historical sources, was somehow the founder of the American economy. Today, the Chase sub-brand of JP Morgan Chase is world-renowned in the banking industry.
Jeep Morgan is now the largest bank in the United States and is listed by S&P Global as the sixth largest bank in the world. The bank’s capital, according to the latest statistics, is estimated at $ 3.5 trillion, which puts the brand at the top of the most valuable banks in terms of market value. The bank is headquartered in Manhattan, New York.
The current brand was formed by the merger of several large financial and credit services companies in the middle of the twentieth century and then, at the beginning of the 21st century. The last major merger took place in 2000 with the acquisition of J.P. Morgan & Co was created by Chase Manhattan Corporation. Each of the companies involved in these mergers has a history of ups and downs, which we will discuss below.
History of establishment
The first financial company to later become Chase ه Manhattan (one of the arms of modern-day Jeep Morgan) was the Manhattan Company, founded in 1799. The apparent purpose of the company was to provide drinking water to the New York area, which was suffering from a yellow fever epidemic in those years. Of course, the ultimate goal was to set up a bank to provide financial services to citizens.
Aaron Boer was the CEO of the Manhattan Company, which somehow started with the goal of ending the dominance of companies such as the Bank of New York and the Bank of the United States. He tried to encourage different companies to store capital in his bank and gradually increase the reputation of his financial activities. After a while, Bohr and other managers came to the conclusion that drinking water supply did not require all of their financial and credit assets, and that a business could be set up next to it. In 1799, the Bank of Manhattan Company was founded on Wall Street and Daniel Ludlow became its first director.
Alexander Hamilton, along with Aaron Bohr, was one of the founders of the Manhattan Company. They were each other’s political rivals. In addition, Hamilton was the founder of the Bank of New York, and his Manhattan corporate banking activities and licenses also threatened his company in some way. However, the quarrel between the two led Hamilton to minimize his activities at the Manhattan Company.
The rivalry between the two politicians and investors led to the famous duel in 1894 in which Bohr killed Hamilton. The duel was banned in New Jersey at the time, but Hamilton still attended at Bohr’s invitation. Eventually, his death made society so nervous that Bohr was forced out of the public eye for a while. Years later, in the 1930s, the Bank of Manhattan bought the weapons of that duel from the Hamilton family of the Church family.
In 1808, Ludlow resigned, and the company decided to outsource drinking water to New York City. They wanted to focus on banking. Manhattan Bank has since begun an upward trend in credit and development, and over time, they have introduced innovative banking methods to their customers.
Banking privileges granted to the Bank of Manhattan were unrestricted, and they could lend to all sections of society, from the wealthy and the landlords to even New York City officials. The adoption of such policies in line with free banking in those years accelerated the development of banking in the United States in the mid to late 19th century. The Bank of Manhattan also developed so rapidly that by the end of the century, it had become one of the largest institutions for the protection of American personal assets.
Mantehan Bank merged with Chase in 1995, and we will examine their history in the years before the merger. Manhattan Bank had 67 branches in New York at the time and was considered one of the most famous and successful banks in the United States.
National Bank Chase
The National Chase Bank was another branch that formed Manhattan Chase in 1955. They began their work in 1877 in New York. Salmon P. Chase was the US Treasury Secretary under Abraham Lincoln, whose name was used to name Chase. In 1911, Albert Henry Wiggins took over the management of Chase, eventually turning the company into a strong arm on Wall Street.
Chase was a small, almost local bank before Vigin’s management, but over time, they have become one of the most famous financial institutions in the world. Vigin has been able to encourage many large companies to invest in its banks by offering a variety of corporate banking services, including trusts.
Subsidiaries established in Chase in the early years of the twentieth century include the Mercantile Trust in 1917 and the Chase Securities Corporation, which provided a variety of investment services, such as stocks and securities, under the management of a major holding company. Those approaches further strengthened Chase ‘s foundations in the capital markets. In addition, Wiggins selected its top executives from large, long-established American companies, which in turn strengthened their relationship.
One of Vigin’s most important activities in Chase management was the influential acquisitions and mergers of the 1920s and 1930s. In those years, seven major New York banks became Chase subsidiaries. The largest was Equitable Trust, which had more than $ 1 billion in assets at the time of its acquisition in 1930. It was owned by John de Rockefeller and run by Winthrop Aldrich. Following his acquisition, Wiggins took over as chairman of the corporate board, which is now the world’s largest bank.
In 1932, Chase’s legendary manager in managing investments, especially in the stock sector, committed illegal acts and was forced to resign. He and many of his colleagues were subjected to numerous inspections in the following years to investigate their illegal activities and the Syrian companies established to disrupt the stock investment system.
After Wiggins, Aldrich took over the management of Chase, and until the end of World War II, he was at the helm of that long and wide organization. The bank continued to grow strongly in those years, and after World War II, Chase became the first bank to establish branches in Japan and Germany. Aldrich knew that the internal development of the bank’s operations, especially in consumer and ordinary banking, needed to change. He eventually decided to merge with the Bank of Manhattan to continue developing his business more rapidly.
Chase Manhattan, under David Rockefeller
Following the merger of Chase and the Bank of Manhattan, a new driving force behind the new company was one of John De Rockefeller’s heirs, David Rockefeller. Rockefeller joined Chase after World War II as Senior Assistant for Foreign Affairs, and in 1949 became the organization’s Senior Vice President. In the early 1950s, he also served as the bank’s urban operations manager. In fact, Rockefeller made Aldrich aware of the benefits of merging with the Bank of Manhattan and encouraged him to do so.
In 1958, one of the most significant events in the history of Chase Manhattan took place. They were the first New York City bank to introduce a shopping card called the Chase Manhattan Charge Plan, which was later renamed the UniCard. A year later, Chase’s famous octagonal logo was designed by Chermayef & Geismar, which still shapes Chase’s visual identity.
Following the merger of the two financial institutions, David Rockefeller took over as Chief Executive Officer and developed New York’s largest bank. In 1969, he became chairman of the board. That same year, Jess Manhattan became a company, and Chase Manhattan Bank continued to operate as a subsidiary.
Under David Rockefeller, the international development of Chase Manhattan was significant. He showed no interest in day-to-day management processes and instead traveled extensively around the world to meet strategically with various financial and political leaders. His work has earned him global prestige in a way that he sees as a good foreign policy for the United States. He eventually became a pillar of US foreign policy and, as a result, was highly influential in the State Department.
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Chase Manhattan’s association with politicians, in addition to its financial and credit benefits, has drawn much criticism. In 1965, they decided to buy a major stake in South Africa’s second largest bank, which was opposed by nationalist and popular groups. These groups called on the people to withdraw their money from a bank that intends to help the apartheid regime.
Rockefeller’s other controversial political-financial activities include supporting the US-led war against Vietnam, which even led to the establishment of a branch in the country’s largest city (by David Rockefeller himself) and provoked strong protests and criticism.
One of the highlights of the history of Chase Manhattan in the last decades of the twentieth century was their cooperation with the monarchy of Iran. In the 1970s, the Shah of Iran was Manhattan Chase’s largest customer in the Middle East. He held about $ 2.5 billion in oil profits in Chase Manhattan, which accounted for about 8 percent of the bank’s assets.
However, the 1970s were not a good time for Chase Manhattan. They lost a major chunk of their business inside the United States; This is because many local and regional banks have gradually reduced their dependence on Chase Manhattan (known as the Bank of Banks). In addition, loans to Latin American countries and delays in repaying them threatened Chase, putting him on the federal list of “troubled banks.” The banks on that list needed direct oversight and advice from governments.
In the last decades of the twentieth century, Chase Manhattan more than accelerated its international growth, with revenues from those sectors accounting for more than half to two-thirds of total revenue. On the other hand, the competition was getting fiercer day by day and the emergence of a competitor called Citigroup was threatening their activities more and more. Despite all those challenges, Chase Manhattan remained the third largest US bank with 226 branches in New York and 105 branches and 34 subsidiaries in other parts of the world.
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Debt Challenge to Developing Countries
The 1980s saw a number of acquisitions and mergers for Chase. They bought the Dutch bank Nederlandse Credietbank in Amsterdam, Lincoln First Bank in Rochester, New York, and six investment and asset savings institutions in Ohio. Another milestone was the acquisition of Continental Bancor in 1986.
David Rockefeller ended his long turbulent tenure at Chase in 1981. Chase’s CEO, Willard C. Butcher, was chosen by Rockefeller himself, and after his departure took over as chairman. Butcher followed in Rockefeller’s footsteps and worked hard to preserve and develop Chase’s international image.
In addition to all the almost positive events that happened to Chase in the 1980s, some of the loans they granted posed enormous challenges in the years to come. The financial difficulties of the two major American companies that chose Chase Morgan as the guarantor and investor were the beginning of financial challenges for them. The companies were Drysdale Government Securities and Penn Square Bank, whose loans caused extensive damage to the American bank.
In addition to challenges within the United States, loans to developing countries were a major problem for Chase Manhattan. Those challenges began in 1987 with Brazil announcing a moratorium on foreign debt. The news came as Chase Manhattan suffered heavy financial losses, setting a record $ 894.5 million, the worst fiscal year for the US banking system since the Great Depression of the early 20th century.
In the late 1980s, pressures from developing countries’s debt, as well as new trends in domestic banks in the United States, slowed the growth of Chase Manhattan. Between 1986 and 1988, 10 percent of the bank’s workforce was adjusted to include some 6,000 Bo employees. In 1988, the New York Times wrote in an article that it might buy the big American bank. Finally, in 1990, due to problems, the board asked Butcher to retire a year earlier and a new team to manage the organization’s executive processes in times of crisis.
After J. Butcher, Thomas J. Laberco served as chairman of the board. He joined Chase in 1964 as an apprentice and progressed rapidly. Laberco played a key role in the Municipal Institute in 1975, rescuing New York City from a financial crisis. In addition, in 1978 he persuaded the board to increase its activities in the small markets. An approach that in the 1990s provided more than half of Bank of America revenue.
Prior to Laberco, executives focused heavily on the international development of Chase Manhattan and neglected the US domestic market to some extent. Economists believed that in the coming years and with the many crises around the world, Chase Manhattan would have to change its sources of income over time. However, the process of changing strategy was done by reducing costs and downsizing (6,000 in 1991). In addition, Laberco decided to reduce its international services and, unlike its longtime rival Citigroup, would no longer be a global comprehensive services bank.
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In the final years of the twentieth century, after a major change in strategy, Chase decided to focus on three main areas of banking services: regional banking in New York, New Jersey, and Connecticut, customer-specific services across the United States, including credit cards, mortgages, and Automobiles, international banking limited to investment.
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In those years, technology was rapidly gaining ground at all levels of society and industry. Chase, under the direction of Arthur F. Ryan, had a comprehensive shift in that direction. In the first step, a $ 500 million investment was made to improve information processing systems. In addition, online banking has been pursued vigorously in collaboration with giants such as Microsoft, Intuit, America Online and CompuServe.
One of the most significant developments of the 1990s was the fundamental change in Chase’s organizational culture, which was made in 1992 with Laberco and Ryan. In addition to focusing more and more on customer service processes, they also instilled a culture of teamwork in the organization. Of course, at the end of that decade, there were several setbacks for Chase.
Between 1993 and 1995, numerous acquisitions and mergers took place in American banks, and great competitors emerged against the old American bank. As a result, Chase dropped from the second largest bank in the country to the seventh. However, difficult years passed for Chase, and many imagined the fate of their purchase. Another major blow to the credibility and value of their shares came in 1995 with the announcement of the decision to lay off 3,000 to 6,000 workers.
The aforementioned pressures peaked in 1995, and Chase had no choice but to merge with another major player in the banking industry. Chemical Banking Corporation broke the news of a $ 10 billion merger that year.
The merger formed the largest American bank in those years with assets of nearly $ 300 billion. Despite the news of the merger of the banks, experts believed that Chase had been bought by Chemical, but Chase’s name was more dignified for the new bank.
Chemical Bank also had a history similar to Manhattan Bank. They started their activities in 1823 in the form of a non-banking company, and after a while, by entering into financial activities and establishing subsidiary banks, they gradually became an independent bank.
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In 1851, all of Komikal’s non-banking activities ceased and Comikel Bank continued to operate as a financial institution. The New York bank also experienced a number of ups and downs in its history, beginning a new era in the late 1920s with the purchase of Chant Manten.