Largest Banks in the World Chase Manhattan Corporation Part 3

About one of the largest banks in the world Chase Manhattan Corporation, history, trivia, and random facts, seamier sides.


The Chase Manhattan Corporation

Seamy Side: In 1944 the U.S. government accused the Chase National Bank of participating in a scheme to smuggle industrial diamonds to Japan, Italy, and Germany from Brazil and Venezuela, in violation of the Trading with the Enemy Act of 1940. The diamonds were important because they were used as cutting tools and helped manufacture war equipment for the Axis powers. According to The Nation, among the U.S. officials who knew about the smuggling, but did not reveal it, was Nelson Rockefeller, the coordinator of inter-American affairs. Nelson is the son of John D. Rockefeller, Jr., and the nephew of Winthrop W. Aldrich, who was Chase's chairman during the smuggling period. In defense of the bank, Aldrich pointed out that the transactions occurred before the Japanese attacked Pearl Harbor, the action that led to a formal U.S. declaration of war.

Chase Manhattan was involved in an attempt by a mysterious Bahamian company, Resorts International, to take over Pan American Airways. Resorts International, which runs a gambling casino, bought 1.5 million shares of Pan Am from Chase's trust department in exchange for $15 million worth of Resorts' bonds plus 3 million warrants to purchase 1.5 million shares of Resorts' stock at $40 per share and 1.5 million at $60 per share. In 1974, when the value of the stock fell below $2 per share, Resorts bought back the stock warrants and $5 million worth of the bonds from Chase for a total of only $1,263,000. The big loser is Chase's client, but the bank's trust department is keeping the client's identity a secret.

Extra Dividends: The island of Puerto Rico is practically mortgaged to Chase Manhattan. One half of the bank's worldwide real estate loans of $1.2 billion are in Puerto Rico. In addition, a Chase subsidiary, Houston Investment Corporation of Puerto Rico, services about $1 billion worth of mortgages on the island.

* The pistols used in the duel between Aaron Burr and Alexander Hamilton were included in the property that the Bank of Manhattan had when it merged with Chase National.

* For 50 years the Bank of Manhattan operated without a safe. It kept its cash in drawers, and the bank was protected by an unarmed guard who kept the bank's key in his pocket. Once, an enterprising bookkeeper went to lunch with $1 million in his pockets. While feeding pigeons in Battery Park, the bookkeeper decided not to keep the money. He returned it to the bank and was fired.

* David Rockefeller's yearly income from the Chase Manhattan is over $1 million a year. The bulk of this comes from dividends on the stock he owns, either directly or through family trusts. In 1971, for example, he owned 337,500 shares, his wife owned over 19,000 shares, his children owned over 3,000 shares, and the Rockefeller family owned about 18% of the stock of Rockefeller Center, Inc., which owned over 190,000 shares of Chase Manhattan. In that year, David Rockefeller and his immediate family received over $720,000 in dividends from the Chase stock they owned directly. The dividend has since been increased by 10%. By 1976 Rockefeller was also receiving a yearly salary with bonuses, of $293,000.

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