Wednesday, July 6, 2011

"1955: When Chase Was Too Small to Bail" (JPM)

From American Banker's 175th Anniversary 'Flashbacks' page:
$7.5 Bil. Chase Manhattan Bank Merger Set
JANUARY 14 — John J. McCloy, chairman of the Chase National Bank of the City of New York, and J. Stewart Baker, chairman of the Bank of the Manhattan Co., in a statement to the press today announced that their respective boards of directors "are in agreement on basic terms to merge the two institutions."

The resultant $7.5 billion bank, to be called "The Chase Manhattan Bank," would be second largest in the United States and largest in New York City. It would operate under the State charter originally granted by the New York legislature in 1799 to the Manhattan Co.

The proposal is subject to approval of two-thirds of the shareholders of each bank, and to the banking authorities. The continuing institution would be a member of the Federal Reserve and FDIC.
Mr. McCloy and Mr. Baker would be chief executive officers, with Mr. McCloy being given the title of chairman, and Mr. Baker chairman of the executive committee and president.

Percy J. Ebbott, president of Chase, has agreed to continue as a vice-chairman of the combined institution, although he has reached retirement age, in order that the continuing institution may have the benefit of his knowledge and experience in the integration and administration of the business of the two banks.
Graham B. Blaine, vice-chairman of Manhattan, is to continue in that position and Lawrence C. Marshall, who is now president of Manhattan, will become an executive vice-president of the continuing institution.
Also, Edward L. Love, George Champion and David Rockefeller, who at present are senior vice-presidents of Chase, are to become executive vice-presidents of the continuing institution. It is further contemplated that all other personnel of the two banks will continue with the combined institution.

Based on the Dec.31, 1954, published figures the enlarged institution would have total resources in excess of $7,500,000,000. Its capital funds would approximate $500,000,000....

HT: the Columbia Journalism Review's The Audit blog, from whom I swiped the headline and who writes:
...The second biggest bank in the country back then had $7.5 billion in assets, which would be about $63 billion in today’s dollars. That would put it about, oh, $2,135 billion ($2.1 trillion) behind the second-biggest bank today.

And it would land Ye Olde Chase Manhattan at No. 32 on the top banks list today, just behind BBVA USA Bancshares Incorporated, whatever that is....MORE
Some more from AB:

Stock Slump Revives Talk Of Investigation

Glass-Steagall Bill Now Awaits Final Signature to Become Law

President Signs the Gold Bill