Largest Banks in the World Chase Manhattan Corporation Part 1
About one of the largest banks in the world Chase Manhattan Corporation, history and founding, size and growth.
BEHIND THE TELLER'S WINDOW--THE BIG BANKS
The Chase Manhattan Corporation
Birth and Growth: The Chase Manhattan Corporation is the holding company for the Chase Manhattan Bank, which was formed by the merger of the Bank of the Manhattan Company and the Chase National Bank in 1955.
On Apr. 2, 1799, the New York State legislature granted a charter to the president and directors of the Manhattan Company to supply New York City with water. The charter included a clause that could be interpreted as a permit for the company to invest excess funds in banking. The clause was included by one of the founders, Aaron Burr, who wanted to compete with Alexander Hamilton's Bank of New York, which then had a monopoly on New York's banking business.
On Sept. 1, 1799, the company bought a house at 40 Wall Street for $30,000, and Hamilton's Federalist party's monopoly on banking was broken by Burr's Republican party. The current Chase Manhattan Bank is still operating under that 1799 charter, making it the oldest bank in the country operating under its original charter.
The Bank of the Manhattan Company stopped supplying water to New York in 1842. It merged with a number of banks, including the Merchants National Bank (founded in 1803), the Central National Bank of New York, and the Seward National Bank and Trust Company.
The Chase National Bank was chartered under the National Bank Act on Sept. 12, 1877. Its founder, John Thompson, a former school-teacher, named the bank after Salmon P. Chase, secretary of the treasury under Abraham Lincoln and the person responsible for the passage of the National Bank Law under which the bank was chartered.
In 1921 it merged the Metropolitan Bank and in 1926 with the Mechanics and Metals National Bank. Also in the 1920s, it merged the Mutual Bank, the Garfield National Bank, and the National Park Bank.
On June 2, 1930, Chase acquired the Equitable Trust Company, and with it the Rockefeller family. John D. Rockefeller, Sr., had acquired a controlling interest in Equitable Trust in 1911, when a new federal reform law had forced the Equitable Life Assurance Society to divest itself of Equitable Trust.
By 1920, Equitable Trust was the nation's eighth-largest bank. By 1929 it had merged 14 banks and trust companies, including Seabord National Bank. The merger of Equitable into Chase made the Chase National Bank the largest bank in the world.
As early as 1951, Chase National wanted to acquire the Bank of Manhattan. However, the Bank of Manhattan's charter required the approval of every stockholder for it to sell its assets to another bank. On the other hand, if the Bank of Manhattan acquired Chase and retained the Bank of Manhattan's charter, only two thirds of the stockholders had to approve the merger.
On Mar. 31, 1955, the Bank of Manhattan merged with the Chase National Bank to form the Chase Manhattan Bank. In the 1950s it acquired the Staten Island National Bank and Trust Company and the Clinton Trust Company. The Chase Manhattan Bank became a national banking association in 1965, and in a reorganization in 1969 it became a wholly owned subsidiary of the Chase Manhattan Corporation, a one-bank holding company.
Size Today: Chase Manhattan is the third-largest commercial bank in the world. It is the primary credit-card issuer in New York and the second-largest issuer of BankAmericards (VISA). It is the major source of consumer credit in the New York City area and the leading underwriter of general obligation municipal securities in the U.S.
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