Chase Bank Admits to Benefiting from Slavery

J.P. Morgan Chase & Co. submitted a formal statement to the city of Chicago, admitting that two banks that came before it had accepted thousands of slaves as collateral before the Civil War.

The bank, headquartered in New York and ranked as the second-largest in the country, expressed regret for its involvement in “a harsh and unfair establishment” and announced its intention to establish a scholarship fund in Louisiana as a means of restitution.

J.P. Morgan officials stated that the bank conducted the investigation in response to a 2003 rule in Chicago. This ordinance mandates that corporations conducting business with the city must investigate their past to identify any connections to slavery.

Chase Bank Admits to Benefiting from Slavery

History Associates Inc. of Rockville completed the historical analysis for J.P. Morgan.

The disclosure made by J.P. Morgan was clearly stated in a letter addressed to the bank’s workers, which was signed by William B. Harrison Jr., the bank’s chairman and chief executive, and James Dimon, the president and chief operating officer, The letter was provided to journalists.

According to the bank, a study revealed that two former banks, Citizens Bank and Canal Bank, which were located in Louisiana, provided financial services to plantations from the 1830s until the Civil War.

The declaration indicated that collateral for mortgages and other debts encompassed land, equipment, and/or enslaved humans.

According to J.P. Morgan’s estimation, the two banks received around 13,000 enslaved individuals as collateral and ended up owning approximately 1,250 enslaved individuals due to defaults. The disclosure failed to elucidate the fate of those individuals.

The consolidation of the two Louisiana banks occurred in 1924, but, it experienced a collapse in March 1933 due to the economic downturn of the Great Depression. In May 1933, a federally authorized bank took over a portion of the bank’s assets. This bank, known as the National Bank of Commerce in New Orleans, was a predecessor of Bank One Corp. J.P. Morgan acquired Bank One last year.

“We express our regret to the African American community, specifically those who are descendants of enslaved individuals, as well as to the wider American population, for the involvement of Citizens Bank and Canal Bank,” stated Harrison and Dimon. “The period of slavery was a sorrowful epoch in the history of the United States and in the history of our company.”

J.P. Morgan announced the establishment of a program named Smart Start Louisiana. The bank has committed to allocating $5 million over a span of five years to fund full-tuition undergraduate scholarships specifically for black students from Louisiana, enabling them to pursue higher education within their home state.

The statement mentioned that students will be provided with the chance to undertake an internship at the firm during the summer, with the aim of securing employment upon graduation.

The forebears of J.P. Morgan Chase & Co. considered slaves as collateral.

When you walk through the doors of your financial institution, you’re probably not thinking about their history. However, many banks in the US have a long and storied history. This includes the J.P. Morgan Chase history. 

This bank’s roots begin all the way back in 1799. However, it wouldn’t be until the 21st century that this bank became J.P. Morgan Chase & Co. How did they do this? 

And how did they survive tumultuous financial times? Let’s take a walk through history and learn how JP Morgan Chase became the financial institution it is today. 

1799: The Beginnings of Chase Manhattan 

In 1799 Aaron Burr and Alexander Hamilton founded the Manhattan Company as a water supply company in New York. His eventual goal was to turn it into a banking company. 

Back then, two banks dominated the banking landscape: the Bank of the United States and the Bank of New York. The company’s charter included a provision allowing them to use surplus funds for banking operations. 

Five months into their operations, they had grown so much that they were able to open the Bank of Manhattan Company. This effectively ended the commercial banking monopoly in New York held by the Bank of New York. 

Hamilton was one of the founders of this bank and severed his ties to the Manhattan Company when this occurred. Hamilton and Burr quickly became political and personal adversaries. 

In 1804 Burr challenged Hamilton to a duel. During the duel, Hamilton is injured and dies the next day. 

1838: Jumping Ahead to the Roots of J.P. Morgan

JP Morgan started as a banking firm in 1838. George Peabody founded the initial company. 

Later, he took on a partner by the name of John Junius Morgan. Morgan eventually took over the firm. His son, Junius Pierpont Morgan, rebranded the firm as J.P. Morgan in 1890. 

In 1854, JP Morgan was a leading marketer in Europe and England for American securities. They played a pivotal role in raising the capital needed to fund the first transatlantic telegraph cable. 

J.P. Morgan built up and became such a powerhouse that they were key in ending the 1907 crisis and helping handle the impact afterward. However, like many banks in 1929, they were hit hard by the stock market crash. 

They attempted to bail out the banking system, even going as far as using their own money. But it was unsuccessful, and the depression deepened. 

1877: Chase National Bank Joins the Scene

Chase National Bank joined the banking scene in 1877. It made slow progress growing. However, that changed when Henry Wiggins joined as CEO. 

Wiggins increased the offerings provided by the bank. This grew the number of corporate accounts at the bank. 

He also made changes to the bank’s leadership and management. He believed that these members of the team were crucial, and he hired directors from the best financial institutions worldwide. 

Chase Bank merged with six other significant banks in the 1920s and 30s. Because of these mergers, by the end of the 50s, this was the biggest bank in the world. 

Eventually, Wiggins was replaced as CEO by Winthrop Aldrich. He made multiple changes that helped Chase National Bank get back on its feet after the Wall Street Crash of 1929. 

1955: The Bank of Manhattan and Chase National Bank

One of the reasons Chase National Bank was able to gain the status of the largest bank in the world by the end of the 50s was its merger with the Bank of Manhattan in 1955. A key person in this merger was David Rockefeller. 

Rockefeller worked his way up in the company after starting as an assistant manager. When the merger concluded, he became the Vice President. He continued on to become the chairman of Chase Manhattan Corporation 14 years later. 

Rockefeller used the bank as a platform to advance American foreign policy. He was able to do this during his time as CEO because of his worldwide travels. During his travels, he networked with corporate and political powerhouses from all over the world. 

Chase National Bank Experiences Problems

From the outside, it seems as if this bank has a fairytale history. They were knocked down and rose up again, even through the depression. 

However, there were years that threatened the existence of this bank even more. One of the factors that made Chase such a powerhouse is that they were the “banker’s bank.” 

Banks that needed bailing out went to them. However, during the 1970s, Chase struggled with domestic losses because these banks weren’t relying on them as much as they had in the past. 

Due to banking decisions involving South American nations, the bank was listed as a problem bank by the FED. Chase still remained the largest bank in the world. However, they were also competing with a bank experiencing significant growth, Citibank. 

During the 80s, things did not get better. Several governments and major corporations defaulted on their loans. Because of this, Chase lost a significant amount of money. 

This led to the bank reducing its workforce. Stock prices also plummeted, and the bank reported a loss in 1987. Finally, during this time, Rockefeller retired. 

He appointed Willard Butcher as the new CEO. However, Butcher did not last long. Eventually, stakeholders formed a new team to run the bank and tackle the ongoing crisis. 

Chase Rebuilds Itself

After years of struggles, it was time for Chase to start rebuilding. They did this under the leadership of their new CEO, Thomas Labrecque. 

Labrecque shifted the focus back to domestic operations. They eliminated several of their operations outside New York and the US. In addition, the workforce was reduced again. 

Labrecque began to grow the bank in new ways after this. He created a focus on using innovative technology. They began to develop a long-term plan for technological strategy during this time. 

The bank invested half a billion dollars to upgrade its system. They also teamed up with some prominent tech companies. These included Microsoft and America Online. 

1995: Chase Merges With Chemical Bank

In 1995, Chase merged with Chemical Bank. Chemical Bank, like so many others, has a long history. Like the original Manhattan Company, its history began as a manufacturing company. 

They were later incorporated as a bank in 1844. The company survived the depression of 1857 and held status as one of the largest banks in the US at the end of the 19th century. 

However, it would take decades for this bank to really start growing again through diversification. When this occurred, by the end of the 1950s, it would become the seventh largest bank in the United States. 

Chemical experienced many of the same issues as Chase during the 1980s. However, they were still able to become the fifth largest bank by merging with Manufacturers Hanover Corporation. 

With both banks still recovering, in 1995, the merger between Chase and Chemical was welcome. It gave both banks the relief they needed, and they continued to make acquisitions that would help their growth. 

2000: J.P Morgan and Chase

We’re now entering the 21st century. In 2000, the merger with J.P. Morgan and Chase Manhattan Corporation occurred. After this merger, they became known as J.P. Morgan Chase & C. 

A few years prior, J.P. Morgan announced they wanted to merge with another bank. They were doing this to help expand their offerings and strengthen their status as a leading financial institution. 

However, this merger is not the end of this bank’s story.

More Acquisitions and Mergers

Over the next decade, J.P. Morgan Chase & Co. continued to merge and acquire other other banks. These mergers continued to propel them forward. 

Some of the key acquisitions and mergers include the following:

• 2004 – Bank One merger
• 2006 – Purchase of New York Mellon’s retail and small business banking network 
• 2007/2008 – Acquisition of Bear Stearns (an investment bank) and the banking operations of Washington Mutual
• 2010 – Acquisition of J.P. Morgan Cazenove

Digital Transformation

Beyond the mergers and acquisitions, digital transformation positioned Chase as a leader in the banking industry. They first released mobile banking in 2010. This change made it easy for their customers to manage their finances online. 

They were also using supercomputers to improve customer experience and improve their offerings. Other more recent technology upgrades include the following:

• 2019 – JPM Coin
• 2021 – App-based current account
• 2022 –  Blockchain technology for collateral settlements

 J.P. Morgan Chase & Co. Community Initiatives

Finally, we can also attribute some of the growth of this powerhouse to their community initiatives. These initiatives have allowed them to invest back in communities around the world and promote sustainability. 

They’ve joined initiatives like the 100,000 Jobs Mission. This initiative promotes hiring veterans and military spouses. They also created a Global Health Investment Fund. 

This allows them to help finance studies providing healthcare solutions. 

Other initiatives include the following: 

• Women on the Move
• New Skills at Work
• Support of Detroit’s economy 
• New Skills for Youth 
• Investing in AdvancingCities 
• Inaugurated the Advancing Black Pathways initiative
• Supporter summer youth employment programs 
• Sustainability initiatives 

J.P. Morgan Chase History

The J.P. Morgan Chase history was long. It wasn’t always easy for this bank. However, through mergers, acquisitions, technology initiatives, and community initiatives they’ve become a powerhouse in today’s world.